An Examination of Board Stability and the Long-Term Performance of Initial Public Offerings
We study the long-term stock performance of initial public offerings (IPOs). We examine how past performance affects the board of directors' stability and how changes in boards affect subsequent performance. We introduce a dynamic, scale invariant stability metric to measure such changes. Our r...
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| Veröffentlicht in: | Financial management 2002-10, Vol.31 (3), p.63-90 |
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| container_title | Financial management |
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| creator | Crutchley, Claire E. Garner, Jacqueline L. Marshall, Beverly B. |
| description | We study the long-term stock performance of initial public offerings (IPOs). We examine how past performance affects the board of directors' stability and how changes in boards affect subsequent performance. We introduce a dynamic, scale invariant stability metric to measure such changes. Our results indicate that among IPO firms, those with poorer initial performance experience greater board instability and that greater board stability is associated with improvement in subsequent performance. These results indicate that board members leave poorly performing firms, rather than shareholders replacing ineffective boards. Retaining boards that experience initial good performance is associated with continued success. |
| doi_str_mv | 10.2307/3666315 |
| format | Article |
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We examine how past performance affects the board of directors' stability and how changes in boards affect subsequent performance. We introduce a dynamic, scale invariant stability metric to measure such changes. Our results indicate that among IPO firms, those with poorer initial performance experience greater board instability and that greater board stability is associated with improvement in subsequent performance. These results indicate that board members leave poorly performing firms, rather than shareholders replacing ineffective boards. Retaining boards that experience initial good performance is associated with continued success.</abstract><cop>Tampa</cop><pub>Financial Management Association</pub><doi>10.2307/3666315</doi><tpages>28</tpages></addata></record> |
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| ispartof | Financial management, 2002-10, Vol.31 (3), p.63-90 |
| issn | 0046-3892 1755-053X |
| language | eng |
| recordid | cdi_proquest_journals_208192092 |
| source | EBSCOhost Business Source Complete; JSTOR Archive Collection A-Z Listing |
| subjects | Analysis Boards of directors Business structures Capitalism Capitalization Chief executive officers Corporate directors Data collection Evaluation Financial performance Going public (Securities) Impact analysis Initial public offerings Organization theory Outside directors Regression analysis Shareholders Stockholders Stocks Studies Turnover Zero |
| title | An Examination of Board Stability and the Long-Term Performance of Initial Public Offerings |
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