Essays on boards of directors

The objective of the first essay, "Board structure in Corporate Spin-offs," is to provide new evidence on the relation between board characteristics and firm performance. I adopt an approach similar to Gertner and Kaplan (1996): I compare boards of spun-off subsidiaries with boards of matching firms presuming that spin-off boards have more optimal structure. The results indicate that boards of the two groups are similar in composition. However, spin-off boards are smaller in size and control smaller equity stakes relative to boards of matching firms. There is no difference in the duality of leadership status. There is no difference in size and composition of board committees of both groups. There is no difference in the meeting frequency of boards. On an individual director level there is no difference in age and professional background. However, directors of spun-off subsidiaries are less likely to be founding members, less likely to be related to blockholders, and are likely to hold more outside directorships. Finally, CEO bargaining power (in terms of experience, tenure, ownership, and founding member status) relative to the board is weaker in case of spun-off subsidiaries.; In the second essay, "The Determinants of Ownership and Board Structures in Spin-offs," I study the determinants of initial levels and subsequent changes in ownership and board structures of spun-off subsidiaries. I provide new evidence using a research setting that minimizes the endogeneity problem. First, I find ownership and board structures to be interrelated. Second, while ownership is affected by both CEO variables and firm variables, board independence is more affected by CEO variables and board size is more affected by firm size. Third, in a three year period subsequent to the spin-off ownership, board independence, and board size increase. Finally, changes in ownership and board variables are interrelated and change in firm size is the dominant explanatory variable.