The Variability of Board Size Determinants: An Empirical Analysis

Document Type


Department or Administrative Unit


Publication Date

Fall 2007


We use a sample of randomly selected CRSP-listed firms to explore the cross-sectional determinants of corporate board size. We find that the average number of directors on boards differs significantly across industries. Further evidence indicates that these differences are jointly and significantly determined by a variety of director, CEO, ownership, and firm-specific variables across industries. The determinants of board size also vary substantially across surviving and delisting firms, regulated and unregulated companies, firms in financial distress, and bankrupt firms. Our models explain as much as 52% of the observed variation in board size. The cross-sectional variation in board size is driven by various economic forces. Therefore, understanding the choice of board structure requires a thorough examination of the associated costs and benefits for individual firms.


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Journal of Applied Finance


Copyright © 2007

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