Our joint research – “Linkage Between Corporate Governance and Value Creation” – between BDTI and METRICAL has been updated as of January 31. The most important inferences are summarized below.
(1) Correlations: Board Practices
Significant correlation between board practices and performance continues.
(a) ROE: Nominations Committee existence, the number of female directors and percentage of INEDs show a significant positive correlation.
(b) Tobins Q: Nominations Committee, retired top management “advisors” (ex-CEO “advisors”), and percentage of INEDs show
(c) ROA (actual): Compensation Committee existence (negative correlation), Incentive Compensation Plan disclosure, and retired top management (ex-CEO) serving as advisors show significant correlation.