Impact of CEO and Board of Director Composition on Financial Companies’ Performance
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초록
The purpose of this study is to examine the correlation between the composition of board of directors of Korean financial companies and its performance and market multiples through cross-sectional analysis by conducting case studies on the companies. It sought to analyze the correlation to infer the implications of the board of directors system on corporate management, in order to contribute to the existing researches on outside director system and corporate management and to enhance understanding of the mechanisms of the outside director system. The sample financial companies selected in the study were the six listed Korean financial holding companies as the sector maintains relatively less deviation in size, shareholding structure, and market dominance compared to other sectors. The study analyzed the impact of the size of the board, frequency of board meetings, proportion of outside directors in the board, and separation of CEO and chairperson’s positions on each company’s performance and market multiples and discussed its implications and limitations.
Abstract
The purpose of this study is to examine the correlation between the composition of board of directors of Korean financial companies and its performance and market multiples through cross-sectional analysis by conducting case studies on the companies. It sought to analyze the correlation to infer the implications of the board of directors system on corporate management, in order to contribute to the existing researches on outside director system and corporate management and to enhance understanding of the mechanisms of the outside director system. The sample financial companies selected in the study were the six listed Korean financial holding companies as the sector maintains relatively less deviation in size, shareholding structure, and market dominance compared to other sectors. The study analyzed the impact of the size of the board, frequency of board meetings, proportion of outside directors in the board, and separation of CEO and chairperson’s positions on each company’s performance and market multiples and discussed its implications and limitations.
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