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Governance Structures of Initial Public Offerings in Australia


*School of Law, University of Melbourne, Carlton, VIC 3010, Australia. Tel: +613-9642-2062, Fax: +613-9642-2092; E-mail:


We study the relationship between venture capital financing, CEO ownership, compensation structure, and board structures for a group of Australian IPO firms. Results suggest that board structures are influenced by the industry the firm is in, and presence of venture capitalists results in a larger board with a higher number of outside directors. CEOs in non VC-backed firms own a significantly higher fraction of firm shares, and CEO ownership is negatively related to both board size and outside blockholders. VC-backed firms are significantly more likely to disclose information about CEO compensation packages, but the relationship between actual board size and structure and disclosure is insignificant. Finally, we also find that venture capital backing significantly decreases the time to change-in-status for firms, whereby firms cease to exist as independent entities.