Board diversity has become a major issue within corporate governance where a number of studies seek to explore the impact of diversity on firm performance. The debate focuses on questions such as whether a corporation's board should reflect the firm's stakeholders or be more in line with society in general. This article uses a sample of listed Danish firms during the period of 1998-2001 in a cross sectional analysis. Despite that fact that Denmark has gone very far in the liberalisation of women, Danish board rooms are still to a large extent dominated by men. Contrary to a number of other studies, this article does not find any significant link between firm performance as measured by Tobin's Q and female board representation. This is also the case for board members' educational background as well as the proportion of foreigners. It is argued that board members with an unconventional background are socialised unconsciously adopting the ideas of the majority of conventional board members, which entails that a potential performance effect does not materialise. Copyright (c) 2007 The Author; Journal compilation (c) 2007 Blackwell Publishing Ltd.

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This study investigates the degree of Danish firm adherence to the Danish Code of Corporate Governance and analyzes if a higher degree of comply or explain disclosure is related to firm performance. This article formulates a methodology for quantifying the degree of comply or explain disclosure. The analysis shows that there is a positive link between ROE/ROA and Danish firm total corporate governance comply or explain disclosure scores. Specifically, this is also the case when this level is increased within the following two categories: board composition and remuneration policy whereas there is no impact on performance when increasing compliance with the recommendations on risk management and internal controls. This article demonstrates that these three areas are the ones where Danish firms show the lowest degree of comply or explain disclosure although the overall adherence to the Danish code's many recommendations is relatively high. This article relates to the burgeoning literature that deals with listed firm compliance with national corporate governance codes and how compliance can be appropriately quantified. It is suggested that compliance is classified into the following four categories: Complies, complies poorly, explains and explains poorly. The article demonstrates that measuring the degree of compliance cannot be done in a mechanical way. Instead, it must be customized to the respective national institutional environment, which suggests country comparisons will be difficult to make. The article contributes to the ongoing discussion of whether firms consider soft law to be a "tick the box" exercise or, alternatively, whether firms should work seriously with the recommendations in order to professionalize and increase competences among board members. The article's findings suggest that soft law may be an efficient way of increasing the quality of corporate governance among listed firms. However, in order to strengthen investor confidence, national code authorities/committees should be more active in penalizing poor explanations as well as cases when firms wrongfully state that they comply with a specific recommendation.

After the emergence of the Cadbury Report in 1992, several countries in the EU, including Denmark, issued their own guidelines of corporate governance. However, whether such recommendations benefit shareholders is a controversial question. This article presents an empirical analysis of financial performance and the composition of semi-two-tier boards using a unique sample of Danish listed firms. It is shown that board size, proportion of insiders and positions held by board members in other firms do not significantly impact performance. Only the average age of the board has a significantly negative impact on performance. Thus, it is argued that board structure only plays crucial role when a firm is in financial trouble or faces a major threat - not under normal circumstances. Copyright Blackwell Publishing Ltd 2005.

It has been advocated within corporate governance that institutional investors may discipline management in listed firms and thereby alleviate the free rider problem associated with dispersed ownership. This article tests this hypothesis using a sample of Danish listed firms during 1998-2001 seeking to determine, whethe r ownership by institutional investors impacts performance, measured by Tobin's q. Using three stage least squares, it is shown that aggregate ownership by institutional investors does not influence firm performance. However, when decomposing the results, it is found that joint ownership by the largest two Danish institutional investors, has a significant negative impact on firm performance. O wnership by banks, and to a lesser, extent insurance companies significantly influences firm performance positively. The results somehow challenge the conventional wisdom, arguing that the black box view of institutional investors should be abandoned. Therefore, it is suggested that a more careful analysis should be devoted to each institutional investor's own legal environment.JEL Classification: L25, G2 and G3