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Sylvie Berthelot ORCID logo, Michel Coulmont ORCID logo, Yves Levant ORCID logo


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The purpose of this study is to analyse linkages between the quality and cost of Canadian firms’ governance practices. With this in mind, the study relates the compensation of chief executive officers (CEOs) and non-executive directors to best governance practice index developed by The Globe and Mail. We collected data for the years 2013, 2014 and 2015, constituting 602 observations from all the Canadian companies included in The Globe and Mail corporate governance ratings for which financial information was available on the Research Insight database. We examined the relationship between the quality and cost of Canadian firms’ governance practices with a regression model. The analyses results tend to indicate some relationship between CEO and non-executive director compensation and the quality of governance practices. However, firm size appears to the determining explanatory factor. The study results also indicate that some activity sectors seem to have better governance practices than others.

Keywords: Corporate Governance, CEO Compensation, Non-Executive Director Compensation, Governance Practices

Authors’ individual contribution: Conceptualization – S.B. and M.C.; Methodology – S.B. and M.C.; Formal Analysis – S.B and M.C.; Resources – S.B. and M.C.; Writing – S.B.; Supervision – Y.L.

JEL Classification: M12, G34

Received: 29.08.2019
Accepted: 14.10.2019
Published online: 15.10.2019

How to cite this paper: Berthelot, S., Coulmont, M., & Levant, Y. (2019). Corporate governance: An analysis of the relationship between quality and cost. Corporate Ownership & Control, 17(1), 71-78.