Do corporate governance standards impact firm performance? Evidence from Canadian businesses.

This study analyzes the relationship between firm performance, as measured by Tobin's q, and the Corporate Governance Index published by the Globe and Mail Report on Business for a sample of Canadian firms over the three year period 2002- 2004. Both annual and pooled data are analyzed. The results suggest that few measured governance variables are important, and the effects depend to some degree on firm ownership. In general, there is no evidence that a comprehensive measure of governance affects performance.