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Corporate governance as a source of competitiveness for Nordic firms

  • Publisert 03.03.2009
  • Sist oppdatert 22.06.2011

This project addresses the causes and effects of board diversity among Nordic publicly traded firms. The study identifies underlying mechanisms for evolution of board diversity based on nine in-depth casestudies. Furthermore, the study addresses the causes and effects of board diversity as it relates to the effects of board composition, motivation for board diversity, factors driving board internationalization, and the effect of board and remuneration committee diversity on top management pay (CEO).

The purpose of the project was to:

  1. Provide Nordic firms with a deeper understanding of the direct and indirect performance effect of various corporate governance mechanisms. We address board diversity (gender, age, education, nationality), board nomination committees, management incentives (CEO pay) and ownership structure.
  2. Provide Nordic regulators (both Stock Exchanges and Governments) with a better basis for decisions-making on various corporate governance issues; such as exchange listing requirements, corporate governance code recommendations, information disclosures, and top management incentives (stock options etc.).
  3. Provide owners, and board nomination committees, with a better basis for recruitment of board members.


Main findings

For the period the 2001-2007 our data reveals, with the exception of Norway, relatively small changes in board diversity among the Nordic firms. Based on a case analysis of nine Nordic firms from four Nordic countries, we report in Chapter 2 that the case companies adopted a reactive rather than proactive approach to the recruitment of diverse board members. Furthermore, the same pattern is evident in Chapter 4, as we find statistical evidence to the general notion that board diversity is (still) primarily driven by the firms’ need for legitimacy, rather than by the potential benefits associated with heterogeneous boards. 


Board Diversity and Corporate Economic Performance

Measuring board diversity by gender, nationality and age dispersion we find that companies with diverse boards generally perform better than companies with homogenous boards in terms of firm value, return on assets and growth (Chapter 3). However, the performance differences are not statistically significant when controlling for other relevant variables. 


Internationalization of the Firm and its Board

Chapter 5 addresses factors driving the internationalization of boards. We find that financial competencies called for by the internationalization of firms positively affect board internationalization, whereas the degree of the internationalization of a firm’s commercial operations seems to have no impact on the internationalization of the board (Chapter 5). Long tenure of a board seems to work as a barrier to internationalization of it. 


Board Diversity and CEO Pay

Finally, we find that foreign and female board membership is associated with higher CEO pay levels among Nordic firms in 2006, whereas female remuneration committee membership is associated with lower CEO pay (Chapter 6). However, the only diversity measure significantly affecting CEO pay growth over time – is the internationalization of boards.


Project duration: February 2007 - May 2009

Abonner på vårt nyhetsbrev


  • Trond Randøy

    Professor, University of Agder & Agder Research, Norway

  • Steen Thomsen

    Professor, Copenhagen Business School (CBS), Denmark

  • Lars Oxelheim

    Professor, Lund University and Research Institute of Industrial Economics, Sweden