International Journal of Business and Economics Volume 12, No. 1 June, 2013

Company Performance and the Two-Tier Board Structure: Empirical Evidence from France

Ellen Rouyer

Department of International Business, Tung Hai University, Taiwan PhD Program in Business Feng Chia University, Taiwan

Abstract

This study’s objective is to assess the impact of board structure on company performance in France, where companies are allowed to choose between a one-tier or a two-tier board structure and to verify the specificities of companies with a two-tier board. To verify the specificities of companies with a two-tier board, we analyze 250 large publicly traded companies and find that the two-tier structure does have a significant impact on long-term performance, measured by Tobin’s Q, yet no impact on cash holdings. Supervisory board size and the percentage of shares controlled by supervisors also have a significant impact on performance. Our findings are consistent with agency theory.

Keywords：corporate governance, performance, board structure.

JEL Classifications：G34.

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