What Do Boards Do? The Measurement of Board Activity, its Impact on Firm Valuation and Board Responses to the Financial Crisis (2012)
We develop a novel measure of board activity using committee data. In a pilot study we show that a large proportion of board activity is carried out by committees. Also, board activity varies with firm, CEO and board characteristics and has changed significantly over time. The novelty of our approach is that we can connect board structure to what boards actually do. We propose to extend the study to a large sample of US and Australian firms. Board committees are understudied, but our results suggest that ignoring them leads to a very incomplete picture of board governance. Therefore, we expect our study to greatly enhance our understanding of Australian and US corporate governance and that our measure will be widely used in future research.