Published In

Journal of Financial & Quantitative Analysis

Document Type

Article

Publication Date

2-2013

Subjects

Business enterprises -- United States, United States. Sarbanes-Oxley Act of 2002, Corporations -- Auditing -- Standards

Abstract

We study the impact of the Sarbanes-Oxley Act on the relationship between corporate governance and company performance. We consider 5 measures of corporate governance during the period 1998–2007. We find a significant negative relationship between board independence and operating performance during the pre-2002 period, but a positive and significant relationship during the post-2002 period. Our most important contribution is a proposal of a governance measure, namely, dollar ownership of the board members, that is simple, intuitive, less prone to measurement error, and not subject to the problem of weighting a multitude of governance provisions in constructing a governance index.

Description

This is the publisher's final PDF. Copyright © 2013 Cambridge University Press. This article first appeared in Journal of Financial & Quantitative Analysis (2013), Vol. 48 Issue 1, p105-135 and can be found online at: http://dx.doi.org/10.1017/S0022109013000045

DOI

10.1017/S0022109013000045

Persistent Identifier

http://archives.pdx.edu/ds/psu/11261

Additional Files
bolton_director-ownership-supplementary-1.pdf (148 kB)
Internet Appendix
bolton_supplenatry.ods (1765 kB)
Director Ownership and Board Characteristics Data: 1998-2007
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