| Author: | Crutchley, C. E. Garner, J. L. Marshall, B. B. |
| Title: | An examination of board stability and the long-term performance of initial public offerings |
| Journal: | Financial Management
2002 : AUTUMN, VOL. 31:3, p. 63-90 |
| Index terms: | Initial public offerings Performance appraisal Board of directors |
| Language: | eng |
| Abstract: | The authors study the long-term stock performance of initial public offerings (IPOs). They examine how past performance affects the board of directors' stability and how changes in boards affect subsequent performance, and introduce a dynamic, scale invariant stability metric to measure such chamges. The 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. The results indicate that board members leave poorly performing firms, rather than shareholders replacing ineffective boards. |
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