An Exploration of Boards of Directors' Quality: The Development of an Index for Directors Attributes and the Relation with Firm Value and Performance

Informações

Código: CON1642
Divisão: CON - Contabilidade
Tema de Interesse: CON-A - Contabilidade para Usuários Externos

Autores

José Elias Feres de Almeida

Resumo

In an environment with poor quality of Corporate Governance Mechanisms, the quality ofdirectors attributes might exert an important role to improve firm’s value and performance. Inthis paper, an index was developed to explore board quality based on Brazilian corporategovernance code and codes comparison (GREGORY, 2000) to measure directors attributesbecause the quality of directors’ characteristics is still unclear. The sample consist in 24Brazilian firms with ADR level 2 and 3 traded at NYSE in the period over 1999-2006totalizing 119 observations of firms. After that, were analyzed around 1.100 directorscurriculums available on report 20-F to develop the index of directors’ attributes quality basedon codes recommendations. The results of the index of quality show that board of directorswith high types of attributes can improve value and some attributes controlled separated thatmake up the Board of Directors Quality Index (BODQI) can improve value too. The mainresults indicate that: high types of professionals, accountants seated in boards, directors withhigh level of education (master and doctor degrees) and that participate of executive programscontributes to firm value.

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