Corporate Governance and Board Effectiveness in Maritime Firms

This paper examines the financial performance effect of three corporate governance mechanisms: (i) founding family CEO, (ii) board ownership, and (iii) board independence. The developed hypotheses are tested using multivariate ordinary least-squares regression on a 3-year sample of 32 publicly traded maritime firms from Norway and Sweden, and compared to the results of the same hypotheses tested on a sample of 96 manufacturing firms. This study concludes that maritime firms with a founding family CEO have better financial performance than maritime firms with a non-founding family CEO. Support was also found for the hypothesis that a high level of board independence enhances profitability in maritime firms. Contrary to agency theory predictions, no significant relation was found between the level of board ownership and firm profitability in maritime firms, although board ownership control was significant in the sample of manufacturing firms. Maritime Economics & Logistics (2003) 5, 40–54. doi:10.1057/palgrave.mel.9100059