An International Meeting of the American Accounting Association American Accounting Association 2006 Annual Meeting August 6–9, 2006 Washington, D.C.

Glen W. S. Dowell
University of Notre Dame

Margaret B. Shackell
University of Notre Dame

Nathan V Stuart
University of South Florida

Abstract: We investigate relationships between governance mechanisms and survival in a sample of 268 Internet firms. We hypothesize that the size of the board and the degree to which it is independent will affect firm survival rates, but that the effect of independent directors will depend upon whether the CEO is the firm’s founder. We find that firms with small or large boards have lower failure rates than firms with intermediate-size boards. Moreover, firms with a high proportion of independent directors on the board have lower failure rates, but only when they have non-founder CEOs. Our documentation of non-monotonic and interactive relationships between governance and performance suggests the need for future research to incorporate such complexities when building theory and empirical tests.

Back to Session Listing

AAA Home Page