Which Corporate Governance Attributes Do Matter?

Abstract

This study investigates which corporate governance attributes have a significant effect on the market’s reaction to SEO announcements and is the first to analyze the effect of legal and joint expertise in this context. The results show that among other corporate governance characteristics, the percentage of directors on the audit committee, board size, number of board meetings, audit committee size, average board age, and average director tenure seem to be significantly related to market reaction. In the case of director expertise, the market reacts more positively to SEO announcements by firms with legal experts or joint experts on their boards.