Smaller, nimble boards of larger firms outperform

A timely article from the WSJ several months ago about how smaller boards outperform bigger boards, based on work done by GMI. It found firms with smaller boards outperformed peers while firms with large boards materially under performed peers.

I note also the the comment about Apple's CEO conferring with directors for advice in the run up to meetings which effective leaders do regularly to turn thier board members into effective, engaged, advisors.

The WSJ article can be found here: http://online.wsj.com/articles/smaller-boards-get-bigger-returns-1409078628.

NYU Stern Professor David L Yermack's seminal work published in the Journal of Financial Economics, which researched this topic in 1996, is found here: http://www.fdp.hse.ru/data/086/482/1225/Sept%2016%20Higher%20market%20valuation%20of%20companies%20with%20a%20small%20board%20of%20directors.pdf.

Yermack's research for over 400 US companies and found firms with smaller boards had higher valuations, using Tobin Q scores for a valuation proxy, when controlling for industry, inside ownership, and governance structures.   

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