Date of Award

Spring 1-1-2021

Degree Type


Degree Name

Doctor of Business Administration Degree



First Advisor

Wang, Wei

Second Advisor

Dr. Haigang Zhou

Third Advisor

Dr. Vasillios Kosteas


In this dissertation, I examine the long-run effect of the 2003 mandated change in board composition on firm performance and CEO compensation. In the first essay, I examine the impact of changes in firm performance to shed light on the debate between agency and insider-knowledge theorists. Agency theorists argue that installing an independent board would increase monitoring of management, thereby enhancing firm performance. In contrast, the insider-knowledge hypothesis suggests that an independent board lacks valuable insider information for effective advisory functions and, hence, is detrimental to firm performance. In the second essay, I investigate the effect of the mandate on CEO compensation to shed light on the debate between two agency viewpoints: the managerial power view and the complementarity view. The former suggests that total CEO compensation will decrease to better align CEOs’ interests with those of shareholders. The latter argues that total CEO compensation will increase following the mandate to compensate executives for bearing firm-specific risks inherent in performance-based incentive packages. Using a difference-in-difference approach, I find a positive relationship between board independence and firm performance in the first essay, consistent with agency theory. I also find a positive relationship between board independence and CEO compensation in the second essay, along with an increase in pay for-performance sensitivity, consistent with the complementarity view.