In this paper we use data on Thai listed firms to test whether firms with higher levels of good governance policy adoption are less likely to violate listing rules and laws put in place to protect shareholders. Our results suggest that Thai firms on average substantively, as opposed to symbolically, implement recommended governance policies, as violations occur less frequently among firms with higher levels of formal good governance policy adoption. However, we also find evidence of symbolic governance among a small group of “talk-only ” firms that issue policy statements about good governance while lagging in the adoption of policies related to shareholders rights and the Board of Directors. A talk-only approach to governance is associated with a predicted increase in the probability of committing violations from 27 % to 49%.

This paper contributes to the literature by using the board structure proxy variables for the corporate governance quality to explore the relationship between analysts’ behaviors and corporate governance. We obtain analyst information from the Institutional Brokers Estimate System (I/B/E/S) database and information of board structure from RiskMetrics (formerly IRRC) database. We extract 10,334 firm-year observations from 1996 to 2006. Using board structure as the main proxy variables for corporate governance, we examine the relations among board structure, analysts’ coverage and analysts ’ forecast error. Controlling for other possible determinants of the properties of analysts ’ forecasts, consistent with our expectation, we find that analysts following firms with high levels of board independence have less forecast error and these firms also have more analysts ’ coverage than those with a low level of board independence. After occurrences in Reg FD and SOX, we find that the increased intensity in regulated disclosure and governance enforcement will offset the effect of board independence on coverage and forecast error.

We investigate the relative importance of the twenty-four provisions followed by the Investor Responsibility Research Center (IRRC) and included in the Gompers, Ishii, and Metrick governance index (Gompers, Ishii, and Metrick 2003). We put forward an entrenchment index based on six provisions: staggered boards, limits to shareholder bylaw amendments, poison pills, golden parachutes, and supermajority requirements for mergers and charter amendments. We find that increases in the index level are monotonically associated with economically significant reductions in firm valuation as well as large negative abnormal returns during the 1990–2003 period. The other eighteen IRRC provisions not in our entrenchment index were uncorrelated with either reduced firm valuation or negative abnormal returns. (JEL G30, G34, K22) There is now widespread recognition, as well as growing empirical evidence, that corporate governance arrangements can substantially affect shareholders. But which provisions, among the many provisions firms have and outside observers follow, are the ones that play a key role in the link between corporate governance and firm value? This is the question we investigate in this article. An analysis that seeks to identify which provisions matter should not look at provisions in isolation without controlling for other corporate governance provisions that might also influence firm value. Thus, it is desirable to look at a universe of provisions together. We focus in this article on the universe of For those wishing to use the entrenchment index put forward in this paper in their research, data on firms ’ entrenchment index levels is available at

Abstract: This paper revisits the topic of relative performance evaluation (RPE) of top management using a large panel of community banks. We show that penalizing executives for poor performance arising from economic downturns is not necessarily inconsistent with the theory. Our empirical results indicate that weak downturn-linked performance is strongly related to increased executive turnover. Furthermore, this relationship is more pronounced in bettergoverned banks, which are more likely to engage in value-enhancing disciplinary actions. Our analysis suggests that executive dismissals during adverse economic conditions are not necessarily a result of bad luck; rather, the analysis implies that bad times are informative about management quality. 2 I.

Abstract: This paper revisits the topic of relative performance evaluation (RPE) of top management using a large panel of community banks. We show that penalizing executives for poor performance arising from economic downturns is not necessarily inconsistent with the theory. Our empirical results indicate that weak downturn-linked performance is strongly related to increased executive turnover. Furthermore, this relationship is more pronounced in bettergoverned banks, which are more likely to engage in value-enhancing disciplinary actions. Our analysis suggests that executive dismissals during adverse economic conditions are not necessarily a result of bad luck; rather, the analysis implies that bad times are informative about management quality. 2 I.