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Good driving Corporate Performance? A meta-analysis of academic research & invitation to engage in the dialogue December 2016 Proposal title goes here | Section title goes here

2 driving Corporate Performance? |Contents

Contents

Abstract 4 Preface 5 Introduction to Corporate Governance 6 Governance and Performance in Academic Research 8 Dilemmas 12 Conclusion & Next steps 13 Methodology & Database 14 Contacts 19

3 Good Governance driving Corporate Performance? | Abstract

Abstract

Purpose Research implications This white paper provides insight into the The research also revealed some relationship between good governance discrepancies between governance and corporate performance. Governance variables proven to contribute to corporate variables that are scientifically proven to performance and the topics highlighted contribute to corporate performance are in the public debate on corporate identified and its impact is assessed. They governance. For example, the culture of may provide guidance for as an , and risk usual practices that will help remediate key practices, are rarely studied as a challenges. corporate governance variable impacting performance, while they are increasingly Design/methodology/approach important topics in the corporate The white paper is a joint effort between governance debate. Deloitte and Nyenrode, combining perspectives from both scholars as well as Practical implications the corporate community. The supporting The overview, best practices and dilemmas research includes an analysis of over 59 provided in this white paper serve as input academic articles published in the last for the ongoing dialogue on enhancing 10 years from highly ranked scholarly corporate governance. journals in the field of management on the relationship between governance and performance.

Conclusion The paper provides evidence for the correlation between several governance variables and corporate performance. These variables include:

•• Board independence

•• Board diversity

•• Remuneration

•• CEO characteristics

•• Oversight

•• Ownership structure

4 Good Governance driving Corporate Performance? | Preface

Preface

Welcome to the first joint white paper of the Deloitte – Nyenrode Research Program investigating the relationship between good governance and corporate performance.

This white paper provides insight into the Meta-analysis relationship between good governance To develop this white paper a meta-analysis Reading guide and corporate performance. Governance was performed on academic research 1. Introduction to Corporate variables that are scientifically proven to published between 2006 and 2016 in the Governance contribute to corporate performance have five highest-ranked academic journals 2. Governance and Performance in been identified by analyzing academic according to the Association of Business Academic Research research. This provides good practices and Schools (“ABS”) ranking. The learning of the 3. Dilemmas guidance identifying and addressing key respective studies were analyzed and its 4. Conclusion & Next steps challenges for Boards and directors. results summarized

Appendix: Methodology & Database Good practices and dilemmas Joint effort In governance there is no one size fits all This white paper is developed as a joint solution. The best approach will depend on effort between the Nyenrode Corporate the organization’s particular circumstances. Governance Institute and Deloitte Research Program Our goal is to assist Boards and directors Governance Services. By combining with identifying the governance issues that insights from scholars and the corporate Deloitte and Nyenrode aim to really matter, provide good practices and community, actionable good practices, and contribute to the dialogue on good guidance, and help promote a dialogue guidance with identifying and addressing governance. We aim to explore good to identify and address dilemmas and related dilemmas have been derived. practices for Boards, provide guidance improve decision-making. The research from this white paper will be to identify and remediate dilemmas used for further action-based research. with the purpose of improving Corporate governance consists of various Deloitte and Nyenrode invite Boards and corporate performance. variables that interact with each other and directors to engage in the dialogue on influence the organization’s performance, governance and performance. Interpretation of main concepts as each in their own distinctive way. Boards applied: and directors are consequently faced •• Performance: long-term corporate with many dilemmas as they seek the Wim Eysink, value creation. right governance approach that matches Senior Partner their organization. Deloitte Governance Services •• Boards: governance body having oversight, for which the legal nature This white paper presents the governance Leen Paape, may differ based on the country of variables that have a proven correlation Dean residence. with corporate performance. Good Nyenrode Business Universiteit •• Good governance: those elements practices are identified and recommended. that a board can influence to be They will provide specific guidance to in of the business and address key challenges. corresponding results, enabling enhanced performance and .

5 Good Governance driving Corporate Performance? | Introduction to Corporate Governance

Introduction to Corporate Governance

Crises and scandals in the past decades triggered global interest in corporate governance, which resulted in an increasingly growing regulatory environment. Did this lead to more effective corporate governance and improved performance?

“The board is responsible The behavior of managers can have a great Following agency theory, corporate for sharing a culture impact on the performance and value of a governance, in the form of rule setting, . Corporate governance is a way of monitoring and incentive and sanctioning that is focused on long handling “the separation of ownership and mechanisms, is needed to align the interests. term value creation control”, where managers of may not have incentives to act in their theory of the company and ’ best interestsi. Corporate assumes the core its business.“ governance as a concept includes the friction is that good performance of separation of roles and responsibilities, depends on the contributions communication channels, and behavior of many different parties. These Jaap van Manen between shareholders, board(s) of stakeholders – shareholders as well as Chairman of the directors (both executives and non- other parties - all have a stake in the Dutch Monitoring Committee executives) and the CEO. company and can choose how to prioritize their stakes based on the Different schools of thought they have about the company. It is the There are several schools of thought responsibility of the management to describing the dynamics of corporate balance all these interestsiv. At the same governance. Most scholars use the time the stakeholders will try to influence agency theory, but stewardship theory management to meet their interests, goals and stakeholder theory are also used to and expectations. explain the dynamics between the different stakeholders in a companyii. These three Following stakeholder theory, corporate theories are not mutually exclusive or governance is needed to make sure that collectively exhaustive, but they provide the voice of stakeholders is heard and that fundamental explanations to many of the information about the company is distributed findings in our research into governance equally to all stakeholders. and performance. Stewardship theory Agency theory Stewardship theory assumes that Agency theory assumes the core friction management should put the long-term is the conflict of interests between the best interest of a group ahead of the different parties involved in the company. individual’s self-interestv. Stewards, unlike An agency problem exists if a principal, agents in the agency theory, consider their such as the , employs an interests to be aligned with the interests agent, such as the CEO and his/her of the and its shareholders. In executive team, to lead the company on addition, managers as stewards are in the the principal’s behalfiii. Agency theory best position to maximize the interests of assumes that managers and shareholders stakeholders, including shareholders, since are expected to have potentially conflicting interests. 6 Good Governance driving Corporate Performance? | Introduction to Corporate Governance

they are most familiar with the dynamics , introduction of culture Does good governance actually of corporate strengths, weaknesses, as acritical part of corporate governance enhance corporate performance? opportunities, and threatsvi. and quality requirements for the “comply There is a clear trend of improvements in or explain” statements. governance codes and corresponding best According to the stewardship theory, corporate practices. Whether they actually improve governance in the form of selecting and Most of these themes are already part governance practices, and company training competent and trustworthy managers of the current code. What is new is performance, is less apparent. is required to commit all parties to work the introduction of, and emphasis on, The research performed for this white towards a common goal without taking culture as an explicit aspect of corporate paper specifically focused on identifying advantage of each other. governance: “The board is responsible for governance mechanisms that have a creating a culture that is focused on long proven impact on enhanced performance, Governance term value creation of the company and its regardless of whether they are marked In 2001, the scandal marked the business. The oversees as a good practice in regulation or codes. beginning of an era in which corporate the activities of the executive board in The results provide practical guidance governance of in particular listed this regard”viii. for company directors, as well as a useful companies became a global discussion. guidance for the people empowered A chain of regulatory events defined The revised code provides a clarification of with formulating governance regulation the corporate governance debate to a the quality required under the “comply or an codes. large extent. explain” mechanism, asserting the board’s accountability for how the code is being Driven by the interests of public applied. The board must be transparent Status of the NL Governance Code stakeholders several governance when deviating from the recommended At the time of publication of this white and codes have been initiated best practice. In doing so they should paper the proposed revision of the globally. The primary goal to impose good explain their alternative course of action Dutch Code had been published. No behavior on listed (and non-listed) firms. and help stakeholders understand how it final version was available yet. Today we have 102 distinct corporate leads to better governance. governance codesvii. After publication, the final version of Global context the revised code will take into effect as Revision of the Dutch Code Best practices and principles stated in per 1 January 2017. In the , the first principle- corporate governance codes emerge based regulation on governance was the around the globe and can be recognized corporate governance code for listed in several international codes. Like companies and their shareholders set up many, the Dutch Code, is influenced by by the Tabaksblat Committee in December the international context of governance 2003. Since then the Dutch code has regulation. For instance, the South African been revised several times, becoming King IV Code of March 2016 already increasingly more comprehensive. mentions the principles of culture and long-term value creation and the UK Code Currently the Monitoring Committee of 2014 references risk appetite as an led by Jaap van Manen is revising the important best practice. Recent revisions Code which will be structured around of the codes in , and have governance themes and no longer per impacted the Dutch revision as well. Even role within the organization, emphasizing in the US dialogues are initiated by a group the most important governance principles of leading executives and representatives according to the committee. Amongst from the sector to these principles are: A greater focus on discuss the need of a principle based long-term value creation, reinforcement of corporate governance codeix.

7 Good Governance driving Corporate Performance? | Governance and Performance in Academic Research

Governance and Performance in Academic Research

The relation between governance and performance is widely researched, but often in a very specific context and with different results. Based on a comprehensive meta-analysis we provide an overview of those variables that really matter in driving performance.

‘Good’ governance leads to Dozens of empirical studies concluded a better performance positive correlation between governance According to theory, ‘good’ governance variables and corporate performance, refers to a combination of structures and measured in both financial metrics as mechanisms that align the interests of well as non-financial metrics. Table 1 on all parties involved (agency theory) and the next page presents an overview of which ensures the voice of stakeholders most distinct variables of governance is heard and information is distributed in the research on the relation between fairly (stakeholder theory). Its structures governance and corporate performance. and mechanisms are needed to commit all parties to work together towards a What is ‘good’ governance? common goal (stewardship theory). We In line with the agency theory, the board of investigated which governance variables directors assumes a monitoring function have a scientifically proven correlation with that aligns the interests of managers with corporate performance to help boards and the interest of the shareholders. Our directors decide on the right structures research showed that various governance and mechanisms. variables have a positive effect on the

Figure 1. Various governance variables have a scientifically proven correlation with performance

Good governance & High High Performance Performance Low Immature Governance Mature

8 Good Governance driving Corporate Performance? | Governance and Performance in Academic Research

Variables Impact on performance

Board independence A higher number of independent board members improves the board’s objectivity and ability to represent multiple points of view. But when the size of the board increases this might slow down the decision- making process Board diversity Demographic diversity has a positive impact on performance. However, when diversity is enforced by regulation (i.e. statutory diversity) there is no such effect.

Remuneration Remuneration contributes to performance by aligning interests between shareholders and management. Stock options for the CEO may work well in good times, but have no effect when firm performance is stagnating. CEO characteristics Having a powerful CEO has a positive effect on performance but also leads to more risky decision-making

Oversight An active oversight role of owners and boards has a positive effect on performance, especially in international joint ventures. A disadvantage however is that owners and boards tend to become less attentive during times of prosperity. Ownership structure Institutional ownership enhances the quality of strategic decisions made by the board, by actively engaging and adding an outside perspective. likelihood that companies improve their However, an increase in independence can Demographic diversity financial and non-financial performance. have a negative effect on environmental The current discussion on regulating board The most effective variables of ‘good’ performance due to a lack of expertise gender diversity is based on convincing governance are board independence, and experience that insiders provide. academic research about the benefits of demographic diversity, remuneration, This effect can be remediated by adding board diversity. Several academic studies CEO characteristics, and oversight and an environmental committee to the conclude that having women on the board ownership structure. board providing expertise and focus on has a positive effect on firm performance environmental problemsxii. (return on assets, return on equity and Board independence Tobin’s Q)xv. However, it is not the presence In the articles reviewed, ‘board Board independence has a positive of women in itself, but the balance between independence’ is commonly measured impact on a company’s technical effiency, men and women that positively affects as the percentage of independent non- measured by its ability to transform input performancexvi. In addition, executives executives on the board. The effectiveness variables like labor, capital and technology should seek positive aspects of other of the board as a monitoring function is into increased sale outputsxiii. In the management cultures and acknowledge proven to be stronger when the number public sector however, a higher number of interpersonal differences in order to of independent members on the board independent board members is associated increase board effectiveness. Our research is higherx. This will improve the board’s with lower administrative efficiency as showed that a high demographic diversity objectivity and its ability to represent decision-making slows when the size of the among board members has a positive multiple points of viewxi. board increasesxiv. effect on financial performance and the quality of strategic decision-making. However, statutory diversity driven by quotas has no effect on performancexvii.

9 Good Governance driving Corporate Performance? | Governance and Performance in Academic Research

Research conducted on diversity Incentives also affect non-financial within family firms shows that for these performance. The presence of companies it is advisable to have a mix of environmental incentives as part of board family members and non-family members compensation or CEO long term pay, in the Top Management Team (“TMT”) show a positive effect on environmental as this has a positive effect on financial regulatory performancexxii. For CEO long performancexviii. This is strengthened in term pay this effect is even stronger in case the board has a strong control over heavily polluting industriesxxiii. the TMT, and when the CEO is a non-family member. We also found studies that CEO characteristics showed such a relationship to be especially The CEO plays a crucial role in setting important during times in which the the strategic direction and improving external environment of the company is firm performance. Depending on their changing, for instance in case of disruptive discretionary powers CEO’s can have a trends or events in the industry. positive influence on a company’s financial performancexxiv, also through the advice Remuneration received via his or her individual external Remuneration can be used to align the networkxxv. CEO duality, where the position interests of the shareholders and the of the CEO and Chairman are combined, management. Board compensation makes the CEO more powerful. Such a requiring directors and the CEO to own dual structure provides a single focal point, stock has a positive effect on a company’s firm stability, and better communication technical efficiencyxix. Granting stock between management and boardxxvi. This options to the CEO and management can structure occurs more in companies with a provide useful incentives for long-term higher proportion of insiders on the board value creation. Research shows that CEO and where the CEO has greater formal stock ownership and other performance power and agenda control. These powerful related compensation also increase CEOs’ CEOs are more likely to realize positive behavior to seek external advice that changes to firm performancexxvii. However, results in better financial performancexx. it should be noted that a powerful CEO also A study in our research amongst 1.694 makes more risky decisionsxxviii. Moreover, companies however evidenced that stock CEO duality may lead to a weakened granted to CEOs during stagnant growth monitoring function of the board due to did not improve future performancexxi. the CEO’s control of the meeting agendas and locationxxix. Hence, CEO duality may have both a positive and negative impact on financial performancexxx.

10 Good Governance driving Corporate Performance? | Governance and Performance in Academic Research

Prior research concludes that companies Ownership structure with separate Chairman and CEO positions The ICGN Global Stewardship Principles Main takeaways “consistently outperformed” companies sets out ICGN’s view of best practices in The variables with a proven impact on with a single individual serving as Chairman relation to stewardship obligations, performance may be obvious, but xxxi and CEO . More recently, the International and processes. Large institutional applying them in practice is not Corporate Governance Network consisting shareholders are believed to have both straight forward. For example, one of over 200 of the leading institutional the incentives and power to monitor does not just change the composition opposed to the CEO and and influence decisions and activities of the board in a day. Chairman being combinedxxxii. of the board. Our research showed that institutional ownership significantly affects As governance elements strengthen Oversight the relationship between board diversity and weaken each other, ‘good’ Several empirical studies demonstrate and the quality of strategic decisions made governance is developed when that boards tend to forget or neglect the by the board, as institutional investors structures and mechanisms are importance of governance during times of actively engage with the board and add balanced, and supportive to xxxvi prosperity. Owners and boards become an outside perspective . It should decision-making. less attentive and in some instances give however be noted that institutional too much freedom and independence to investors vary in their investment horizon At the moments that crucial decisions the CEO. If the CEO holds the position of and corresponding engagement. There need to be taken, directors are often Chairman during this time, the effect may are traditional institutional investors faced with tough dilemmas. The right xxxiii even be stronger . This overconfidence investing for the longer term holding either governance setup should help bias has a reversed effect on board concentrated or diversified investment identifying, acknowledging and effectiveness. As the monitoring activities portfolios and there are term active understanding these dilemmas and of the owners and effectiveness of the shareholders and hedge funds. support the board in taking a board decrease, the CEO is increasingly well-balanced decision. more likely to assume power and increase personal wealth. Building on academic insights, our research program continues to Board meeting frequency is a proxy for explore how governance affects time spend on monitoring. Research performance by building further however shows that as the number of understanding of how governance board meetings goes up, the volatility of affects the decision-making process in xxxiv returns increases . A specific study into the boardroom, and consequent International Joint Ventures shows that an impact on performance. increased level of involvement of the board has a positive effect on performance. This effect is the strongest in case the International Joint Venture has a broad functional scope and/or the parents’ markets overlapxxxv.

11 Good Governance driving Corporate Performance? | Dilemmas

Dilemmas

With many conflicting values at stake, boards are often faced with tough decisions. The right governance helps boards to effectively deal with dilemmas and make well- considered decisions.

Moments that matter in this behavior in an environment with The setup of governance mechanisms in Many topics on the board’s agenda are many conflicting demands. One of the the boardroom has a big influence on the ‘regulated’, following standard procedures main obstacles in decision-making is that way how executives deal with dilemmas. or are even being incorporated. The executives simply miss out on certain Decision-making is not just an activity of decisions that really matter are those that important values and only recognize them individuals, it is a matter of creating the fundamentally affect the organization’s after the fact. That’s when executives right conditions so decision makers can performance. Identifying and adequately become aware that the best solutions are make balanced choices. Identifying the dealing with these decisions is key, often in the pastxxxviii. moments that matter, acknowledging especially because these decisions often to have dilemmas and understanding imply making a choice between several Governing decision-making how the right governance will help is desirable, or undesirable, options with no Dilemmas typically occur in times of essential. Our research program continues clear ‘best’ alternative. transition, confrontation, incidents to explore how good governance can and reputational events, with probably help boards enhance their decision- Recognizing dilemmas the worst conditions for well-informed making and improve performance based Dealing with dilemmas requires time for and balanced decision-making. Having upon the academic lessons from the reflection, stakeholder dialogue, different the right governance in place is key to previous chapters. perspectives and gradually reaching a counterbalance these adverse conditions. point of self-confidence prior to making a decision. Yet, the full and formal agenda of Figure 2. Most decisions in the boardroom follow set procedures, but those decisions bringing tough the board often prevents required time to dilemmas are the ones that really matter. We believe that how well the board is equipped to identify do so. Too often a crucial decision is not these moments and reconcile dilemmas is key to good performance. identified as a dilemma and dealt with like any issue that is business as usual. Events requiring decisions

Recognizing dilemmas contributes to Incidents the quality of decision-making and has a Regulation positive impact on performance. However, Industry change Governance in the Boardroom research on decision-making shows New entrants Repetitive that executives need to overcome many Geo politics decisions obstacles in dealing with dilemmasxxxvii. Client issues It requires the skill to make a judgement Dilemma’s, e.g. between several, sometimes competing Media •• Intervene or let go values. The judgement has to be translated Disruptive •• Seek confrontation to an appropriate course of action and technologies •• Apply expert solution or resolution process executives need the courage to engage . . .

12 Good Governance driving Corporate Performance? | Conclusion & Next steps

Conclusion & Next steps

Our research concludes with six governance variables that may have a positive impact on performance. These insights provide a solid basis to engage in the dialogue on how they actually enhance decision-making and performance in practice.

Research results Next steps Our research results support the In conjunction with the introduction of the Main takeaways hypothesis that good governance enhances new Dutch Corporate Governance Code Building on the academic lessons from corporate performance, as it produces six we will engage in a dialogue with boards Deloitte and Nyenrode, we will governance variables with an academically and directors to further explore how continue to explore Boardroom proven positive impact on performance. good governance actually contributes to dilemmas that impact governance These identified ‘good’ governance better performance. If you want to stay involved you can variables are: board independence, board participate in: diversity, remuneration, characteristics Some themes included in the proposed •• Interviews with directors to validate of the CEO, oversight and ownership revision of the Code overlap with our the research findings and further structure. Conclusive evidence is found lessons learned, but will likely not provide explore the governance dilemmas that each of these variables can enhance practical implementation guidance. In that are encountered in practice. corporate performance, but there is no addition, our research concludes that one size fits all approach to applying them additional variables need to be considered •• Ongoing dialogue, through events in practice. in designing good governance. and roundtables on governance and performance and corresponding The ‘good’ governance variables identified In the next phase of the Deloitte - dilemmas in the Boardroom. provide tools to structurally improve the Nyenrode Research Program we will study decision-making process in the boardroom, what the critical dilemmas are that boards The next step in the research program and the firm’s performance. The board can and directors face and apply the academic will be: make the right decisions if circumstances lessons gained during the first phase of the •• Developing a framework of types so dictate. This requires , research program. of boardroom dilemmas and objective oversight and empowering corresponding interventions. alternate views. We kindly invite you to engage in this dialogue and contribute to the How this works in practice is the subject development of good governance practices of the next steps of our research program. that enhance corporate performance. It We acknowledge that many of the critical will help you implement better governance decisions boards have to make represent and performance. tough dilemmas. To address this we will explore what these dilemmas usually are, and how our academic insights can contribute to finding the right interventions to identify and facilitate critical boardroom dilemmas.

13 Good Governance driving Corporate Performance? | Methodology & Database

Methodology & Database

Within meta-analysis the lessons of individual studies are analyzed and consolidated. Combining the results of academic research will help us with a better understanding of governance as an overarching concept.

We reviewed the results of 59 selected Year of publication Country of analysis studies including almost 120 empirically We selected studies published between Considering the comparability of the investigated relationships that examine the 2006 and 2016. studies we have also excluded studies in effect of a range of concepts of corporate which the country of analysis was other governance on firm performance, both Keywords than the USA, Commonwealth countries financial and non-financial. The lessons As we study the influence of good or continental Europe. Leaving us with from the individual studies were analyzed governance on performance the keywords 46 studies, describing 106 relationships. and consolidated. “Governance” AND “Performance” should As demonstrated in graph number 1and be included in the abstract of the academic graph number 2 the U.S. was the country of Selection criteria articles. These first three selection criteria analysis in half of the studies. The U.S was The selection of the studies is based on a resulted in 185 studies. also the country of residence of most (42%) few criteria. These include the name of the of the authors. journal and year of publication, keywords in Accessibility and relevance the abstract, country of analysis and finally 104 studies were accessible in the Direction of the relation the direction of the relation studied. databases used. Based on a first reading Finally we selected studies based on the of the abstracts another 45 studies were direction of the relation: Only studies Journals excluded. Leaving us with 59 studies, describing the influence of governance To ensure the quality of the selected describing 120 relations. on performance were in scope. Out of the studies we only leveraged top-ranked initial 185 studies, we now have 41 studies journals. For this we used the ranking of the left, which describe 75 relationships Chartered Association of Business Schools (“ABS”) as it ranks the articles based on Graph 1: Country of analysis Graph 2: Country of residence of the author peer review, statistical information related to citation and editorial judgements from the detailed evaluation of hundreds of publications over a long period of time. The 17% top 5 journals are: 27% •• Journal 42% •• Academy of Management Journal 50% •• British Journal of Management 9% •• Journal of Management Studies 33%

•• Journal of 22%

USA USA Commonwealth (UK, , ) Europe Continental Europe Asia Other

14 Good Governance driving Corporate Performance? | Methodology & Database

Industries Listed/non-listed firms Methods of research

1% 2% 1% 6% 2% 9% 21%

13% 71% 77%

97%

Not specified Listed Quantitative Man Non-listed Qualitative PS Family firm Review TMT FSI

Description of the database Methods of research In addition, we could not control for For the in scope studies that were reviewed 97% of the studies applied a quantitative potential selection bias of the researchers we have recorded the meta-data to provide research method. In a few studies a who chose the corporate governance insight in the context and quality of the qualitative research method or review variables for the selected studies. academic articles studied. was used. Agency theory, stakeholder theory and stewardship theory are the main schools Description of the unit of analysis Year of publication of thought describing the dynamics In most studies (71%) there was no specific Most studies were published between of corporate governance. These three industry focus, at least this was not 2008 and 2014, during the financial crisis. theories provide fundamental explanations referenced. In the other 29% of the studies to many of the findings in this study. there was a focus on Manufacturing Limitations of this study However, most of the selected studies are (“Man”), Public Sector (“PS”), Telecom, This study provides an overview of the just based on the agency theory. As a result Media and Technology (“TMT””) or the past learnings of corporate governance some parts of the corporate governance Financial Service Industry (“FSI”). as the selected studies are set in the past. debate are not sufficiently addressed in The research was mostly about listed firms In reality most markets are constantly academic research. This reminds us of (77%), in some cases about non-listed firms adapting to evolving corporate governance some parts of corporate governance that (21%) and in only a few studies a specific codes and the effect of such efforts will are very relevant but are hard to measure kind of firm such as family owned firms was only be measurable in the future. and therefore not highlighted in this mentioned. overview of academic research.

15 Good Governance driving Corporate Performance? | Section title goes here

16 Draft – under embargo Good Governance driving Corporate Performance? | Endnotes

Endnotes

i. Berle, A.; Means, G. (1932). The Modern x. Kock, C.; Santaló, J.; Diestre, L. xvi. Campbell, K.; Mínguez-Vera, A. (2008). Corporation and private property. (2012). Corporate Governance and the Gender diversity in the Boardroom and Transaction Publishers, New Brunswick Environment: What Type of Governance Firm Financial Performance. Journal of and London. Creates Greener Companies? Journal of Business Ethics, Vol. 83, pp. 435-451. Management studies, ii. Melis, D.A.M. (2014). The institutional xvii. Ben-Amar, W. et. al. (2013) What Makes Vol 49, pp. 492-514. investor stewardship myth: Better Boards? A Closer Look at Diversity

A theoretical, legal and empirical analysis xi. Mallin, C.; Michelon, G.; Raggi, D. (2013). and Ownership. British Journal of of prescribed Monitoring Intensity and Stakeholders’ Management, Vol. 24, pp. 85-101. stewardship in a Dutch context. PhD Orientation: How Does Governance Affect xviii. Patel, P.; Cooper, D. (2014). Structural disserations Nyenrode Business Social and Environmental Disclosure? power equality between family and Universiteit, ISBN 9789089800671. Journal of Business Ethics, non-family TMT members and the Vol. 114, pp. 29-43. iii. Jensen, M.C. and W.H. Meckling (1976). performance of family firms. Academy

The Theory of the Firm: Managerial xii. Walls, J.; Berrone, P.; Phan, P. of Management Journal, Behavior, , and Ownership (2012). Corporate Governance and Vol. 57, pp. 1624-1649. Structure, Journal of Financial Environmental Performance: Is there xix. Bozec, R.; Dia, M.; Bozec, Y. (2010). , 3, no. 4 (October), really a link? Strategic Management Governance–Performance Relationship: p. 305-60. Journal. Vol. 33, pp. 885-913. A Re-examination Using Technical iv. Freeman, R.E. (1984), Strategic xiii. Bozec, R.; Dia, M.; Bozec, Y. (2010). Efficiency Measures. British Journal Management: A Stakeholder Approach, Governance–Performance Relationship: of Management Studies, Boston: Pitman Publishers. A Re-examination Using Technical Vol. 21 pp. 684-700. Efficiency Measures. British Journal of v. Hernandez, M. (2012). Toward an xx. McDonald, M.; Khanna, P.; Westphal, Management Studies, understanding of the psychology of J. (2008). Getting them to think outside Vol. 21 pp. 684-700. stewardship. Academy of Management the circle: Corporate Governance,

Review, 37(2), p. 172-193. xiv. Andrés-Alonso, de P.; Azofra- CEO’s External advice. Academy of Palenzuela, V.; Romero-Merino, E. Management Journal, vi. Davis, J.H., F.D. Schoorman, (2012). Beyond the Disciplinary Role of Vol. 51, pp. 453-475. L. Donaldson (1997), Towards a Governance: How Boards Add Value to stewardship theory of management, xxi. Kanagaretnam, K.; Lobo, G.; Spanish Foundations. British Journal of Academy of Management Review, Mohammad, E. (2009) Are Stock Options Management, Vol. 21, pp. 100-114. Vol. 22, No.1, p. 20-47. Grants to CEOs of Stagnant Firms Fair

xv. Fancoeur, C.; Labelle, R.; Sinclair- and Justified? Journal of Business Ethics, vii. www.ecgi.org/codes/all_codes.php Desgagne, B. (2008). Gender Diversity Vol. 90, pp. 137-155. viii. Monitoring Committee (2016). Principle in Corporate Governance and Top xxii. Rodrigue, M.; Magnan, M.; Cho, C. 2.5, Proposal Dutch Corporate Management. Journal of Business (2013). Is Governance Code for Dutch listed Ethics, Vol. 81, pp. 83-95. Substantive or Symbolic? An Empirical companies. Mallin, C.; Michelon, G.; Raggi, D. (2013). Investigation. Journal of Business Ethics, ix. Larking, G. (2016). It’s Commonsense Monitoring Intensity and Stakeholders’ Vol. 114, pp. 107-129. to Have a U.S. Corporate Governance Orientation: How Does Governance Affect xxiii. Beronne, P.; Gomez-Mejia, L. (2009). Code. Harvard Law School Forum on Social and Environmental Disclosure? Environmental performance and Corporate Governance and Financial Journal of Business Ethics, : an integrated Regulation. Visited on 10/25/2016. Vol. 114, pp. 29-43. agency-institutional perspective. https://corpgov.law.harvard. Academy of Management Journal, edu/2016/10 /11/its-commonsense- Vol. 52, pp. 103-126. to-have-a-u-s-corporate-governance- code/

17 Good Governance driving Corporate Performance? | Endnotes

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18 Good Governance driving Corporate Performance? | Contacts

Contacts

Wim Eysink Leen Paape Board advisor Dean Deloitte Governance Services Nyenrode Business Universiteit +31 (0)6 5141 7099 +31 (0)6 5364 4623 [email protected] [email protected]

Ton Berendsen Daniëlle Melis Board advisor Chair Deloitte Governance Services Nyenrode Corporate Governance Institute +31 (0)6 5341 6989 Nyenrode Business Universiteit [email protected] +31 (0)6 1327 0268 [email protected]

Arjan ten Cate Andre Nijhof Advisor Professor Sustainable Business Deloitte Governance Services and Stewardship +31 (0)6 1234 2901 Nyenrode Business Universiteit [email protected] +31 (0)6 5360 5519 [email protected]

Denise Valkering Hanna Waltsgott Advisor Researcher & Project Manager Deloitte Governance Services +31 (0)6 8739 1292 +31 (0)6 2321 4217 [email protected] [email protected]

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