Director Characteristics and Firm Performance

The traditional methodology examining optimal boards relates a simple board variable� (e.g., independence or board demography) to firm performance, however, ig- noring other board characteristics.� This paper investigates how the education and business� experience of directors affect firm� performance. The sample consists of 1,574 directorships from 224 listed firms� in Switzerland.� Using� OLS� and including control variables, the results show that graduates of minor Swiss universities are negatively related to Tobin’s Q, and industrial knowledge and Tobin’s Q are nega- tively� correlated if the firm� has more divisions.�� In� addition, director fixed effects (or unobserved characteristics) are significant, but improve the explanatory power of the models only by 5 percent.Corporate governance: Board of directors; Director characteristics, Education and business experience

Boards: Independent and Committed Directors?

Regulators and shareholders are calling for independent directors. Independent directors, however, have numerous external professional commitments. Using� To- bin’s Q as an approximation� of market valuation and controlling for endogeneity, our empirical analysis reveals that neither external commitments are negatively related to firm� performance nor is independence positively related to it. However,� more precise analyses show that executive directors and family representatives have a positive relationship with Tobin’s Q. In contrast, external executives are negatively correlated with firm valuation. Moreover, the study indicates that the frequency and duration of meetings are negatively affected by the fraction of executive directors on the board. Insiders potentially reduce the need for meetings because of their specialist competence.� The results invalidate rules� advocating independent directors and oppose the engagement of directors with external commitments.Corporate governance: Board of directors; Board independence; Board busyness; External commitments

Foundations of Corporate Governance

This paper outlines the foundations of corporate governance. The discussion includes a review on the modern corporation, transaction costs theory, agency costs theory, legal investor protection, investor protection by corporate governance and its various mechanisms, as well as an overview of the determinants of corporate governance

Idealised simulations of cyclones with robust symmetrically-unstable sting jets

Idealised simulations of Shapiro-Keyser cyclones developing a sting jet (SJ) are presented. Thanks to an improved and accurate implementation of thermal wind balance in the initial state, it has been possible to use more realistic environments than in previous idealised studies. As a consequence, this study provides further insight in SJ evolution and dynamics and explores SJ robustness to different environmental conditions, assessed via a wide range of sensitivity experiments. The control simulation contains a cyclone that fits the Shapiro-Keyser conceptual model and develops a SJ whose dynamics are associated with the evolution of mesoscale instabilities along the airstream, including symmetric instability (SI). The SJ undergoes a strong descent while leaving the cloud-head banded tip and markedly accelerating towards the frontal-fracture region, revealed as an area of buckling of the already-sloped moist isentropes. Dry instabilities, generated by vorticity tilting via slantwise frontal motions in the cloud head, exist in similar proportions to moist instabilities at the start of the SJ descent and are then released along the SJ. The observed evolution supports the role of SI in the airstream’s dynamics proposed in a conceptual model outlined in a previous study. Sensitivity experiments illustrate that the SJ is a robust feature of intense Shapiro-Keyser cyclones, highlighting a range of different environmental conditions in which SI contributes to the evolution of this airstream, conditional on the model having adequate resolution. The results reveal that several environmental factors can modulate the strength of the SJ. However, a positive relationship between the strength of the SJ, both in terms of peak speed and amount of descent, and the amount of instability occurring along it can still be identified. In summary, the idealised simulations presented in this study show the robustness of SJ occurrence in intense Shapiro-Keyser cyclones and support and clarify the role of dry instabilities in SJ dynamics

Boards: Independent and Committed Directors?

Regulators and shareholders are calling for independent directors. Independent directors, however, have numerous external professional commitments. Using To- bin’s Q as an approximation of market valuation and controlling for endogeneity, our empirical analysis reveals that neither external commitments are negatively related to firm performance nor is independence positively related to it. However, more precise analyses show that executive directors and family representatives have a positive relationship with Tobin’s Q. In contrast, external executives are negatively correlated with firm valuation. Moreover, the study indicates that the frequency and duration of meetings are negatively affected by the fraction of executive directors on the board. Insiders potentially reduce the need for meetings because of their specialist competence. The results invalidate rules advocating independent directors and oppose the engagement of directors with external commitments

Does culture affect corporate governance?

The legal environment is one important determinant of corporate governance. However, within legal families, also cultural differences can explain the level of corporate governance to some extent. We analyze this relationship for the case of Switzerland. Swiss firms are mainly located in two cultural areas, the German and French speaking parts of Switzerland. Swiss federal law is equal in both regions which allows us to investigate the effect of cultural differences on corporate governance. Although we only find few differences, we observe that board composition is significantly driven by language-related factors: French-speaking directors are prevalent in Swiss French boards and German-speaking directors in Swiss German boards. More importantly, however, boards of these two parts of Switzerland are more likely to be structured as in their respective neighboring countries. Furthermore, in the French part, transfer restrictions of shares are more common