Corporate governance as a determinant of corporate values

Abstract

Purpose

This paper aims to test the impact of corporate governance structure on corporate values.

Design/methodology/approach

The paper employs factor analysis and three‐stage least squares to identify and explain variance in corporate values.

Findings

In accordance with the proposed theoretical framework ownership, board and stakeholder structure are found to influence corporate values. When value determinants are taken into account there is no significant relationship between values and profitability.

Research limitations/implications

This is a pilot study of 71 Danish firms. Further research needs to address measurement of corporate values and to test hypotheses on larger datasets.

Practical implications

One practical implication is that corporate values should be grounded in the company's ownership, board and stakeholder structure. Real changes in corporate values may require real changes in governance structure.

Originality/value

The paper tests a new approach to the study of corporate values which connects values to governance. It thereby establishes empirical foundations for current discussions about corporate values. This should be important both to practical work on company missions, values and responsibilities and to academics who search for an operational approach to the study of corporate values.

Citation

Thomsen, S. (2005), "Corporate governance as a determinant of corporate values", Corporate Governance, Vol. 5 No. 4, pp. 10-27. https://doi.org/10.1108/14720700510616569