Director FAQ: The Link Between Corporate Governance and Financial Performance

In brief: This NACD FAQ answers a question that can arise for any board seeking to add value: how do specific corporate governance practices affect company financial performance?  The report summarizes the findings of empirical research examining correlations among  various measures of both governance and performance.  

This resource can help your board:

  • Sharpen its focus on financial performance as a possible outcome of good governance
  • Draw on empirical data to justify or revise certain governance practices
  • Resist calls for “one size fits all” governance

Most relevant audiences: board chairs, lead directors, governance committee chairs, and corporate secretaries; also, senior management and advisors of private companies that are in the early stages of building their boards