Quantifying Company Director performance

Tom McKay

Quantifying Company Director performance. A new report reveals what we all probably guessed a long time ago... company directors with ''skin in the game'' generally outperform - by a lot. A new report by Macquarie Equities, Board Matters, found that companies that had directors holding stock had better shareholder returns and return on equity. Using a long-short back-test analysis, it found that return on equity was 13.7 percentage points higher and relative share price outperformance was 8 per cent. The Macquarie report also analysed tenure and the impact of independent directors with interesting results. ''In our analysis, companies that have independent directors that have served for a longer period on the board had a superior ROE compared to those boards with shorter tenure using the five-year test period. This could indicate that corporate memory and experience can enhance returns.'' Read more: (VIEW LINK)

Tom McKay

I'm the Managing Director and Co-Founder of Livewire. I'm passionate about collecting and curating the markets most informed insights every day so that our members can discover new investment ideas. If you would like to get in touch - please use...


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