Does Corporate Governance Matter? Structural Elements of Corporate Governance, Firm Behavior, and Performance

Professor Paul H. Malatesta joined the faculty of the University of Washington in 1980. He is a Professor of Finance and the Norman J. Metcalfe Faculty Fellow at the University of Washington Business School. His academic research and teaching interests focus on corporate finance, especially corporate governance, corporate acquisitions, securities offerings, and privatization of state-owned enterprises. Professor Malatesta’s research papers have been published in the American Economic Review, the Journal of Finance, the Journal of Financial Economics, the Journal of Financial and Quantitative Analysis,and elsewhere. His works have been cited more than 500 times in the academic literature. Professor Malatesta has been a Managing Editor of the Journal of Financial and Quantitative Analysis since 1987. The Journal is considered by academics to be among the most widely read, selective, and prestigious peer reviewed publications in the field of finance. Less than ten percent of the papers submitted to the Journal for review are accepted for publication. The Journal’s associate editors and ad hoc referees review approximately 600 submissions per year. In addition to his academic experience Professor Malatesta has consulted with various government and business organizations, including the United States Navy, Eastman Kodak Corporation, and Weyerhaeuser Company. He has also served as a Research Associate for the Weyerhaeuser Company Pension Fund Investments group and as a Managing Director of the investment management firm Benchmark Plus Partners, LLC.

Corporations account for a large share of economic activity. How they perform is clearly important. A corollary to this is that the governance of corporations is also important. In this lecture I address the question of whether or not there are observable structural elements of corporate governance that are reliably associated with firm behavior and performance. I also discuss public policy efforts to promote sound corporate governance.