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Board Characteristics and Corporate Performance in the Netherlands

  • Hans van Ees

    ()

    (Faculty of Economics, University of Groningen)

  • Theo J.B.M. Postma

    (University of Groningen)

  • Elmer Sterken

    (University of Groningen)

We analyze the performance-board characteristic nexus of Dutch listed firms. The Netherlands has a continental-European two-tier board structure. This makes it interesting to analyze the impact of management and supervisory board characteristics (size, composition and remuneration) on corporate performance. In Dutch corporate governance, the supervisory board plays a role in (anti-) investor protection. Subsequently, both board size and composition are variables that reflect corporate decision-making. In order to deal with this endogeneity problem, we use governance indicators such as (anti-) investor protection to endogenize board variables. Our results reveal that the size of the management board is not affecting corporate performance. We find support for a negative relationship between the supervisory board size and firm performance. Moreover, we observe a negative relationship between the proportion of supervisory board members with network ties to other organizations and performance.

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File URL: http://college.holycross.edu/RePEc/eej/Archive/Volume29/V29N1P41_58.pdf
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Article provided by Eastern Economic Association in its journal Eastern Economic Journal.

Volume (Year): 29 (2003)
Issue (Month): 1 (Winter)
Pages: 41-58

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Handle: RePEc:eej:eeconj:v:29:y:2003:i:1:p:41-58
Contact details of provider: Postal: c/o Dr. Alexandre Olbrecht, The Anisfield School of Business 205, Ramapo College, 505 Ramapo Valley Road, Ramapo, New Jersey 07430, USA
Phone: (201) 684-7346
Web page: http://www.ramapo.edu/eea/journal.html
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