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Corporate Governance Structure and the Valuation of Australian Firms: Is There Value in Ticking the Boxes?


  • Darren Henry

    Corresponding author
    1. The author is from the Department of Economics and Finance, School of Business, La Trobe University. He acknowledges comments and suggestions from Andrew Stark (editor) and an anonymous referee; assistance with the collection of hard-copy annual report documents by Taliya Cikoja; and comments from participants attending the Seminar Workshop Series in the Department of Economics and Finance at La Trobe University, the 12th Annual Conference of the Multinational Finance Society in Athens, Greece, July 2005 and the RMIT University Corporate Governance Workshop, Melbourne, November 2005.
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* Address for correspondence: Darren Henry, School of Business, La Trobe University, Bundoora, Victoria, 3086, Australia. e-mail:


Abstract:  This paper provides an investigation of the valuation and agency consequences of corporate governance policy. This is achieved by examining variation in voluntary adoption by Australian listed firms, during the period from 1992 to 2002, of corporate governance frameworks representative of the governance code of practice introduced by the Australian Stock Exchange in 2003. The findings indicate benefits for firms from overall corporate governance structuring, but not in isolation, in line with the requirements now in place, and a significant role played by institutional and external shareholders as alternative agency mechanisms. Corporate governance structure is found to be important, however, the likely impact of disclosure of governance practice or compliance on valuation is less clear.