The Effects of Board Composition and Direct Incentives on Firm Performance

Abstract

This paper attempts to measure difference in firm performance caused by broad composition and ownership structure. These two variables are intended to measure the direct incentives and monitoring faced by top management. We also control for a number of otheк variables that are likely to be correlated with corporate performance. We do so to improve the precision of our estimates, as well as to eliminate much of the omitted-variable bias that has undoubtedly affected previous studies of board composition.