CORPORATE GOVERNANCE REFORM: INFLUENCE ON SHAREHOLDER WEALTH

RICHARD W. POUDER AND R. STEPHEN CANTRELL


Abstract

Many corporations have adopted governance practices advocated by share- holder activists. To date, the net effect of such practices is largely unknown. Both practitioners and academics agree that additional research is required to deter- mine whether governance practices have actually improved corporate performance. This paper attempts to resolve some of the uncertainties surrounding changes in governance practice. We consider four governance practices widely advocated by shareholder activists and test whether their net and individual effects have an impact on shareholder returns following layoff announcements.

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Gibson D. Lewis
Center For Business and
Economic Development
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