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In many respects, Australian boards more closely approach normative “best practice” guide-
lines for corporate governance than boards in other Western countries. Do Australian firms
then demonstrate a board demographic-organisational performance link that has not been
found in other economies? We examine the relationships between board demographics and
corporate performance in 348 of Australia’s largest publicly listed companies and describe the
attributes of these firms and their boards. We find that, after controlling for firm size, board
size is positively correlated with firm value. We also find a positive relationship between the
proportion of inside directors and the market-based measure of firm performance. We discuss
the implications of these findings and compare our findings to prevailing research in the US
and the UK.
researcher. Pettigrew (1992) noted that the inverse association between board size and
empirical findings could be used to offer two firm value.
different theoretical interpretations depend- In their study, Muth and Donaldson (1998)
ing upon whether the study was based on investigated the validity of agency theory and
resource dependence theory (e.g. Pfeffer and stewardship theory as well as considering the
Salancik, 1978) or class based theory (Zeitlin, implications of resource dependence theory.
1974). As with both agency and stewardship Their final sample size was 145 companies,
theories, by concentrating only on links to the based on board structure data for 1992 and
external environment, resource dependence including performance measures for 1992,
theory ignores alternative activities of the 1993 and 1994. The study revealed that
board such as providing advice (Westphal, network connections are a separate dimension
1999; Lorsch and MacIver, 1989), monitoring from board independence and that steward-
(Johnson et al., 1996; Bainbridge, 1993; Fama, ship theory only holds “where directors are
1980) and strategising (Kesner and Johnson, strongly network connected” (Muth and Don-
1990; Lorsch and MacIver, 1989). The research aldson, 1998, p. 26). Their results challenge the
effort follows the familiar pattern in agency assumption under agency theory that the
and stewardship theories – a design aimed at monitoring role of the board is valuable and
uncovering a single segment of the corporate are in direct conflict with Lawrence and Sta-
governance mechanism rather than a holistic pledon (1999) in reporting that despite a lack
view of how boards add value. of consistent evidence the proportion of inde-
pendent directors had a negative effect on
shareholder wealth and sales growth.
Previous Australian studies
Australian research into boards of directors is Research objectives and hypotheses
less developed than that in the US and the UK.
The Australian literature on corporate gover- Our overall research objective is to review the
nance has been primarily descriptive, with an Australian experience concerning board char-
emphasis on describing the size and com- acteristics and corporate performance in light
position of boards and the extent to which of alternative theories of the board composi-
board interlocks occur. Only Lawrence and tion–corporate performance relationship. Aus-
Stapledon (1999), Muth and Donaldson tralia represents an interesting case study as
(1998) and Stapledon and Lawrence (1996) in many respects it more closely resembles
have attempted to examine the board world’s best practice concerning board com-
demographics–firm performance link. position than other comparable countries. This
As Table 1 shows, Australian studies have is illustrated in Table 2, which shows that Aus-
overwhelmingly concentrated on describing tralia has a higher proportion of independent
the network of inter-corporate relationships. directors than either the US or UK. In both
Of the two previous Australian studies that Australia and the UK, CEO duality is less
examined aspects of the board demograph- common than in the US, where this form of
ics–corporate performance link, Lawrence and leadership structure is predominant. In the
Stapledon (1999) used a similar methodology US, companies also tend to have larger boards
to Bhagat and Black (1998/2000, 2002) and than companies in either Australia or the UK.
focused on movements in share price as the Table 3 presents a summary of some of the
measure of corporate performance. This study major reports or guidelines that have made
failed to find consistent evidence that a direct recommendations concerning board composi-
relationship exists between board demo- tion. While remaining silent on issues of board
graphics (including the proportion of inde- size, these reports do recommend that the
pendent directors) and firm performance in roles of chairman and CEO be separated and
publicly listed Australian companies. Their that outside and/or independent directors
sample was restricted to the top 100 Australian represent at least a majority on the board. Con-
companies (ranked by market capitalisation), sequently, previous studies of board composi-
but because they used a longitudinal measure tion in Australia show that Australian boards
of share price, their effective sample was only more closely follow these normative sugges-
around 70 companies. Of interest was their tions than do US or UK boards.
comment that the proportion of independent For the purpose of examining this Aus-
directors was positively related to company tralian experience, we have three more spe-
assets, net profit and EBIT. Lawrence and cific research aims. The first is to describe the
Stapledon (1999) also noted that they could board composition of Australia’s major
not substantiate the finding of Yermack (1996) publicly listed companies and examine the
and Eisenberg et al. (1998) that there is an correlates of board composition. The second
192
Table 1: Previous Australian studies
directors
Kiel and Tolhurst 1978 Top 50 publicly – – Ownership and Found that control of the top 50 companies
(1981) listed companies control was in the hands of management.
Hall (1983) 1971– 1200 publicly listed 2030 5.6 Interlocks Hall found that there was a significant level
July 2003
CORPORATE GOVERNANCE
Muth and 1994 Top 145 publicly – – Board structure and Network connections are shown to be a
Donaldson (1998) listed companies firm performance separate dimension to board independence.
Board independence has a negative effect
© Blackwell Publishing Ltd 2003
Laing, 2001
Weir and
1995–96
directorships and to explore the correlates of
0.47
0.17
320
these interlocks. The third and final aim is
to examine the links between board demog-
raphics and corporate performance. Given
these specific research objectives, hypotheses
O’Sullivan,
1995
2000
0.51
0.15
175
CEO duality and interlocks with corporate
performance.
UK
1991–94
0.47
100
0.82
326
1990
321
US
expect that:
Hypothesis 2: Board size is positively correlated
Bhagat and
Black, 2002
0.69
0.23
1996
2001
1989
5.56
0.62
1995
8.89
0.73
0.17
and
outside directors
CEO duality
Table 3
relationship, with some evidence that the (e.g. Daily and Dalton, 1992, 1993; Rechner
relationship is stronger for smaller firms. and Dalton, 1989). Boyd (1995, p. 309) suggests
Given the smaller size of Australian boards that neither agency nor stewardship theory
and the meta-analysis results, we expect that can predict the consequences of CEO duality
and that “duality can have a positive effect
Hypothesis 5: The size of the board is positively
under certain industry conditions, and a nega-
correlated with firm performance.
tive effect under other conditions”. Overall,
we shall again adopt the null hypothesis:
Proportion of outside directors and Hypothesis 7: Firms with a separate chairman
firm performance and CEO will be uncorrelated with firm
performance.
As discussed earlier, the impact of agency
theory on corporate governance research can
be observed in the predominance of studies Interlocks and firm performance
that examine two key questions: how the com-
position of boards of directors affects firm per- Finally, resource dependence theory maintains
formance (e.g. Coles et al., 2001; Barnhart that the board is an essential link between the
and Rosenstein, 1998; Wagner et al., 1998) firm and the external resources that it needs to
and how the leadership structure of the maximise performance (Pfeffer and Salancik,
company (i.e. the duality of the CEO/chair- 1978; Pfeffer, 1972, 1973; Zald, 1969). As noted,
man role) affects firm performance (Dalton et unlike agency theory and stewardship theory,
al., 1998). With respect to board composition, resource dependence theory draws from both
agency theory suggests that a greater propor- the sociology and management disciplines
tion of outside directors will be able to monitor (Pettigrew, 1992). Sociologists have tended to
any self-interested actions by managers and so concentrate on the links that a board provides
will minimise the agency costs (Fama and to a nation’s business elite (Useem, 1984),
Jensen, 1983; Fama, 1980). As noted, findings access to capital (Stearns and Mizruchi, 1993;
to date have yielded equivocal empirical Mizruchi and Stearns, 1988) or links to com-
support. petitors (Mizruchi, 1996, 1992). Using a similar
On the other hand, proponents of steward- methodology, management scholars, through
ship theory contend that superior corporate the development of the resource-based view
performance will be linked to a majority of (RBV) of the firm (Barney, 1991; Wernerfelt,
inside directors as they work to maximise 1984), see the board as a potentially important
profit for shareholders (Donaldson and Davis, resource for the corporation, especially in
1991; Donaldson, 1990). Given these two linking the firm to external resources (e.g.
contrasting theories and the empirical find- Hillman et al., 2000). In all cases, more links
ings discussed earlier, we will adopt the null would provide greater access to resources and
hypothesis concerning the proportion of so we hypothesise that:
outside directors and firm performance.
Hypothesis 8: High levels of board interlocks are
Hypothesis 6: The proportion of outside direc- positively correlated with firm performance.
tors is uncorrelated with firm performance.
Methodology
CEO duality and firm performance
Agency theorists argue that the same person Sample
should not hold the CEO and chairman roles Our objective was to carry out the first large-
simultaneously, as this will reduce the effec- scale investigation of the Australian corporate
tiveness of board monitoring (Finkelstein and governance environment and so data were col-
D’Aveni, 1994). Stewardship theorists argue, lected on the top 500 companies (as measured
however, that one person in both roles may by market capitalisation) trading on the Aus-
improve firm performance as such a structure tralian Stock Exchange Limited (ASX) in 1996.
removes any internal and external ambiguity Data on both the companies and the directors
regarding responsibility for firm processes of those companies came from the 11th edition
and outcomes (Finkelstein and D’Aveni, 1994; of Huntley’s Shareholder: The Handbook of Aus-
Donaldson, 1990). As previously discussed, tralian Public Companies (Huntley, 1997). These
there is evidence in support of stewardship companies represent 97 per cent of the total
theory (e.g. Donaldson and Davis, 1991), along market capitalisation of the companies listed
with a body of research that finds no impact on the ASX (Huntley, 1997). The actual
of leadership structure on firm performance number of companies in our database is 460.
return on assets (Hoskisson et al, 1994; formance are discussed. Table 4 reports the
Cochran and Wood, 1984), earnings per share descriptive statistics and correlation matrix of
(Pearce and Zahra, 1991), and return on equity the variables used in the study.
(Baysinger and Butler, 1985). In general, the
major concern with accounting measures is
that they are historical and so lag the actual The companies
actions that bring about the results. Neverthe- The overall defining characteristic of the
less, we have included ROA as a measure of top 348 companies in the Australian Stock
corporate performance as this is a common Exchange is the very heavy skew in the dis-
measure used in the literature. tribution of measures of company size. A
In contrast, market-based measures of firm minimal number of companies dominate the
performance relate to the overall value placed population with respect to size of assets,
on the firm by the market and may not bear revenue and market capitalisation. This can be
any relationship to asset valuations, current seen in Figure 1, which illustrates the cumula-
operations or even the firm’s historical prof- tive percentage of assets, revenue and market
itability. These valuations emphasise the ex- capitalisation for the companies in the study.
pected future earnings of the firm and so are Another aspect of interest is the extent of
considered a forward-looking indicator that diversification of the larger publicly listed
reflects current plans and strategies. Measures companies. The mean number of SIC codes
in this category include market to book ratio, per company was 3.7, with a median of 2 SIC
Tobin’s Q (Barnhart et al., 1994) or constructed codes. While the majority of companies we
indices such as the Sharpe measure studied were diversified at the first level of SIC
(Hoskisson et al., 1994). code (56 per cent), only a limited number
Given that there is strong market efficiency record over 10 SIC codes (5 per cent) and the
in Australia (Kasa, 1992; Ball et al., 1989), it was largest number of codes recorded was 28.
decided to follow Morck et al. (1988), Herma- Table 5 provides a full breakdown of the relat-
lin and Weisbach (1991) and others in using edness of the companies’ SIC codes.
Tobin’s Q. Under the strong market assump- Table 4 shows that there is a strong positive
tion, any positive impacts of board demo- relationship between firm size and greater
graphics would be readily apparent to market levels of diversification (as measured by the
participants and so reflected in the market number of SIC Codes). This result is sup-
capitalisation of the firm (Fama, 1998). ported by the ANOVA results reported in
The unavailability of many of the variables Table 6, with an inspection of means showing
comprising the theoretical Tobin’s Q used in that highly diversified companies are larger
studies by Lindenberg and Ross (1981) and than one-industry companies.
Morck et al. (1988) prevent similar calculations
being used in this study. Instead, we employed
Chung and Pruitt’s (1994) alternative formula
The boards
for approximating Tobin’s Q: The average size of our sample of Australian
publicly listed companies is relatively small,
market value of common stock containing an average of 6.6 directors with a
+ book value of preferred stock range from 2 to 19. As highlighted in Table 4,
there are also strong correlations between the
+ book value of long term debt size of the board and company size variables
Tobin' s Q =
book value of total assets of assets, revenue and market capitalisation
(transformed to natural logarithms (ln) unless
Finally, as both ROA and Tobin’s Q are subject otherwise stated). Consequently, Hypothesis 1
to short term fluctuations, we employed a is supported. Hypothesis 2 is also supported
three year average for the years 1996, 1997 and as more diversified companies, as measured
1998. by the number of SIC codes, have larger
boards. This could, however, be associated
with more diversified companies also being
Results larger.
Turning to the use of outside directors, the
The results of this analysis are presented mean proportion of non-executive directors is
under four subheadings. First, the overall size 69 per cent, with a median of 75 per cent. Only
and diversification of the top 348 companies in six companies had fully internal boards, with
our study is briefly described. Second, their most of these being the listed property
board composition is described. Third, the trusts of larger financial corporations. Thirty-
issue of director interlocks is explored. Finally, five companies had fully external boards.
the links between the variables and firm per- Larger boards are correlated with a greater
100%
90%
80%
Cumulative Percentage
70%
60%
50%
40%
30%
20%
10%
0%
109
121
133
145
157
169
181
193
205
217
229
241
253
265
277
289
301
313
325
337
1
13
25
37
49
61
73
85
97
Company Ranking
Variable Mean SD 1 2 3 4 5 6 7 8 9
proportion of outside directors, but this is a have more than ten interlocks. Interlocks are
weak correlation. The relationship streng- strongly positively correlated with assets,
thens if the natural log of proportion of revenue and market capitalisation. In addi-
outside directors is taken. Also, the proportion tion, a greater number of interlocks are
of outside directors is positively correlated positively correlated with the number of SIC
with firm size as measured by assets and codes and board size. In short, larger boards
revenue, but not with market capitalisation. are associated with larger companies, more
Also using the measure of number of SIC diverse companies and more heavily inter-
codes, a greater level of diversification is not locked boards.
associated with a higher proportion of outside
directors.
With respect to the chairman, there was a Correlations
notable lack of CEO duality (23 per cent). At a simple correlation level of analysis, there
Interestingly, having an independent chair- is a significant relationship between some
man is related to a larger board size and a of the four board demographic variables, size
higher proportion of outside directors and is of board, proportion of outside directors,
also associated with larger companies. CEO duality and number of interlocks. Spe-
cifically, larger board size is associated with
a separate chairman and CEO, a greater
Interlocks proportion of outside directors and a greater
As with the company size distribution, there number of interlocks, as already noted. A high
is a heavy skew in the number of company proportion of outside directors is associated
interlocks. While interlocks range from 0 to 28, with separation of the chairman and CEO role,
the mean number of interlocks is 6.4, while the but not with a greater number of interlocks.
median is 4. Less than 20 per cent of the firms Neither are the number of interlocks and CEO
duality related.
As the number of board interlocks is sig-
Table 5: Relatedness of a company’s SIC codes nificantly correlated with board size, Hypothesis
3 is supported. Similarly, the number of inter-
locks is also highly significantly correlated
Level of relatedness Percentage of with firm size and so Hypothesis 4 is also
companies supported.
There are three simple correlations between
One SIC code 30.2 board demographies and Tobin’s Q, namely
proportion of outside directors, CEO duality
Multiple SIC codes – 6.9 and number of interlocks. This suggests that
same at second level better performance (as measured by Tobin’s
Multiple SIC codes – 6.3 Q) is related to inside directors, an executive
same at first level chairman and a greater number of interlocks.
Yet, of interest, none of these board demo-
Diversified at first level 56.3 graphic variables is significantly related
of SIC Code with the average ROA. This is despite their
being a strong correlation (0.319) between the
three-year average Tobin’s Q and the three- turnover to asset ratio than their larger coun-
year average ROA. terparts. However, none of the three measures
Before reviewing the combined impact of of board demographics are significant in
these board demographic variables on firm predicting these historical measures of firm
performance, it is instructive to review the cor- performance.
relations between the two performance meas- Hypothesis 5, at a simple correlation level,
ures themselves, these board demographic is not supported. However, after controlling
measures and the firm size measures, as covariance through the regression analysis
shown in Table 4. Firm size, as measured by reported in Table 7, there is a significant cor-
assets and revenue, is inversely related to the relation between board size and the market-
three-year average Tobin’s Q, but market cap- based performance measure of Tobin’s Q.
italisation is positively correlated with Tobin’s Since this is a more robust test of the true
Q. Only assets are negatively correlated with relationship, Hypothesis 5 is supported in
the three-year average ROA. As noted above, the case of the market-based performance
there is a 0.319 significant correlation between measures. Hypothesis 5 is, however, not sup-
the three-year average Tobin’s Q and three- ported for the accounting-based measure of
year average ROA. This suggests that compa- performance.
nies with significant book values or asset bases At the simple correlation level, Hypothesis
find it disproportionately more difficult to 6 (the null hypothesis that the proportion of
produce relatively high stock prices, com- outside directors is not correlated with firm
pared to smaller companies. Larger compa- performance) is rejected in the case of the
nies, by asset size, also find it difficult to market-based measure of performance, but is
produce a strong percentage return (ROA) on not rejected for the accounting-based measure
those assets. of performance. As shown in Table 4, the pro-
Using the two measures of size, assets and portion of outside directors has a significant
revenue in 1996, to predict the three-year correlation with the market-based measure of
average Tobin’s Q provides a significant result performance, but no significant correlation
(R2 = 0.109, p = 0.000). Board size (positive rela- with the accounting-based measure. These
tionship) and proportion of outside directors results also hold under the stronger test con-
(negative relationship) are also significant in trolling for covariates in the regression analy-
predicting the three-year average Tobin’s Q, as sis reported in Table 7.
show in Table 7. Hypothesis 7 conjectured that the presence
When the accounting-based measure of of CEO duality would not be correlated with
ROA using the three-year average perfor- firm performance. At the simple correlation
mance is used as the dependent variable, only level, this hypothesis is not supported for the
the two firm size variables of assets and market-based measure only. However, it is
revenue are significant. This relationship is supported when controlling for covariates
interesting, showing that organisations with using both market-based and accounting-
low asset bases but with strong revenues based measures of performance in the regres-
predict high return on assets. The result is not sion analysis (i.e. there is no significant
hugely surprising given that assets comprise correlation).
the denominator of the measure, but it indi- Hypothesis 8 (high levels of board inter-
cates that smaller asset-based firms either locks are positively correlated with firm
have a higher profit margin or a higher performance) is supported at the simple
correlation level for the market-based duality. There is a weak simple positive rela-
measure, but not for the accounting-based tionship between interlocks and the market-
measure. However, the regression analysis, based measure of firm performance; however,
which controls for firm size, reveals that it is this could be due to the relationship of board
not in fact related to either measure of firm size with firm performance. In short, while the
performance. evidence supports the notion that boards will
seek to link into the external environment,
there does not appear to be any link between
Discussion this behaviour and firm performance.
Turning to correlates of board demograph-
The results of this extensive study of the top ics and firm performance, different results
Australian publicly listed companies inform occur depending on whether the market-
the current debate about corporate gover- based measure of firm performance or the
nance. Of general interest is the negative rela- accounting-based measure of firm perfor-
tionship between company size as measured mance is used. As noted earlier, there are
by assets and revenue and the market-based strong links between company size and per-
performance measure of Tobin’s Q. Over the formance for both these measures. However,
period of this study, larger companies, as with respect to market-based performance, the
measured by both their assets and revenue, market rewarded larger boards and also
were penalised by the market compared to boards with a relatively lower proportion of
their smaller counterparts. Given the timing of outside directors, after allowing for the effects
this study, it may be argued that the interest of company size. This seems to support the
in technology and knowledge-based com- arguments put forward by stewardship
panies drove this result. Similarly, using the theory. On the other hand, no such relation-
accounting-based measure of return on assets, ship can be found with respect to the account-
a larger asset base is associated with a poorer ing-based performance measure.
relative return, a result which can be partly These results are consistent with our other
attributed to the simple mathematical fact that findings (Nicholson and Kiel, 2001a, 2001b),
the larger the denominator, the greater the which adopted a case study method to inves-
numerator of profit is required to obtain the tigate the boardroom. In the case-based
return. Interestingly, if one controls for asset approach to the relative merits of agency
size, revenue is strongly positively correlated theory, stewardship theory and resource
with return on assets. In short, companies that dependence theory, we found that no single
can achieve greater revenues on a lower asset theory offers a complete explanation of the
base are more likely to show strong profitabil- corporate governance–corporate performance
ity measured in an accounting sense. relationship, but rather elements of each
There are some very distinct relationships theory can be seen to apply in different
between company size and board composi- circumstances. These empirical results add
tion. We find that larger companies have larger further weight to our earlier conclusions. It is
boards, more interlocked boards, a greater not a matter of agency theory or stewardship
proportion of outside directors and are more theory or resource dependence theory. Rather
likely to separate the roles of chairman and each theory has a contribution to make to the
CEO. These results can be interpreted in light governance debate. There is evidence that
of two predominant theories of corporate gov- boards do need to be alert for agency issues
ernance. First, they go some way to support and there is a greater likelihood that this will
the predictions of agency theory. For these occur when there are outside directors on the
larger companies, the greater number of direc- board. Nevertheless, the market also rewards
tors is seen as important, with a higher pro- the knowledge that inside directors bring to
portion of outsiders and the separation of the the board table. This is consistent with our
roles of chairman and CEO in order to monitor case study reviews of board dynamics that
and control the organisation. also illustrate examples of inside directors pro-
Second, these findings also provide support viding strong support to various board roles.
for resource dependence theory as these larger In addition, boards appear to seek to link
companies see the need for greater links with with the environment, particularly in large,
other organisations. This then translates to complex organisations.
these firms appointing more directors and What then are the implications of our find-
seeking more interlocks. The number of inter- ings for the current debates about corporate
locks are related to company size and hence governance? First, within practical limits,
also board size. However, there is no relation- there are benefits to be had from a larger board
ship between the number of interlocks and relative to the size of the company. Given some
the proportion of outside directors or CEO US results (Yermack, 1996), which suggest an
inverse relationship between board size and research is required to see whether such rela-
firm performance, but given the much larger tionships exist over time. It would also be
average size of US boards, as noted above, it appropriate to examine the extent to which the
is possible that an inverted “U”-shaped rela- composition of boards change, and how those
tionship exists between board size and firm changes in composition are related to changes
performance. In short, too few directors could in the market environment and strategy of the
lead to a suboptimal decision-making body. organisation. In summary, research into cor-
On the other hand, too large a board also may porate governance does have a significant con-
be negatively related to performance. tribution to make to the current normative
As boards can play a major value-adding debate about the desirability of various cor-
role (Kiel and Nicholson, 2003, 2002), compa- porate governance practices.
nies should be seeking to maximise the bene-
fits that can come from the correct skills mix
on the board. This can add to what we have
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Vic.: Centre for Corporate Law and Securities Geoffrey Kiel is Professor of Management at
Regulation, University of Melbourne. the University of Queensland. He has had an
Stearns, L. B. and Mizruchi, M. S. (1993) Board extensive career as a management consultant,
Composition and Corporate Financing: The
Impact of Financial Institution Representation on
senior manager, management educator and
Borrowing, Academy of Management Journal, 36(3), academic researcher. He has been published
603–618. in journals such as the Journal of Marketing
Stening, B. W. and Wai, W. T. (1984) Interlocking Research, Business Horizons and the European
Directorates Among Australia’s Largest 250 Cor- Journal of Marketing. His current research
porations 1959–1979, Australian and New Zealand focuses on corporate governance and he is the
Journal of Sociology, 20(1), 47–55. co-author of the major Australian practical
Stiles, P. and Taylor, B. (1993) Benchmarking Cor- guide to governance, Boards that Work: A New
porate Governance: The Impact of the Cadbury Guide for Directors, published by McGraw Hill.
Code, Long Range Planning, 26(5), 61–71. Gavin Nicholson is joint managing director of
Tirole, J. (2001) Corporate Governance, Economet-
rica, 69(1), 1–35.
Competitive Dynamics Pty Ltd. He has been a
Toronto Stock Exchange Committee on Corporate manager in the hospitality sector and has
Governance in Canada. (1994) Where were the extensive consulting experience in work force
Directors? Toronto: Toronto Stock Exchange. profiling projects. In his specialty of corporate
Useem, M. (1984) The Inner Circle: Large Corporations governance, Gavin has consulted to national
and the Rise of Business Political Activity in the U.S. research companies, government owned cor-
and U.K. New York: Oxford University Press. porations, not-for-profit organisations, statu-
Wagner, J. A., III, Stimpert, J. L. and Fubara, E. I. tory authorities and several large Australian
(1998) Board Composition and Organizational public companies. He is currently undertak-
Performance: Two Studies of Insider/Outsider ing a PhD on the strategic impact of corpo-
Effects, Journal of Management Studies, 35(5),
655–677.
rate governance and regularly presents his
Weir, C. and Laing, D. (2001) Governance Struc- research findings to various groups through-
tures, Director Independence and Corporate Per- out Australasia, Europe and North America.
formance in the UK, European Business Review, He is co-author with Geoffrey Kiel of Boards
13(2), 86–95. that Work: A New Guide for Directors.
“Shareholder activism, for too long, has been an ad hoc affair. Now, for the first time, there
are comprehensive guidelines available, based on best practice and offering, practical, tan-
gible help to institutional investors.” Ken Ayers, Investment Council Chairman, National Asso-
ciation of Pension Funds on the new ISC Code