CORPORATE GOVERNANCE AND THE BANKRUPT FIRM - AN EMPIRICAL-ASSESSMENT

The incidence of bankruptcy has risen dramatically among firms of all types and sizes in the past decade. Little is known, however, about th e effects of alternative governance structures on the propensity of an organization to file Chapter 11 bankruptcy. Relying on logistic regre ssion for periods 5 years and 3 years prior to the bankruptcy, as well as the contemporaneous period, we examine the relationships among ind ependent/interdependent board composition and the structure of CEO/boa rd chairperson positions and the filing of bankruptcy. While controlli ng for a series of financial indicators and firm size, the results ill ustrate robust explanatory power for the governance variables for both lagged periods.