Voluntary Listing Requirements and Corporate Performance: The Case of the Dey Report and Canadian Firms


  • We thank two anonymous referees for suggestions that significantly improved the paper, Cynthia Campbell (the Editor) Henk Berkman, Rebel Cole, Jeff Coles, Erik Devos, Phil English, Larry Rose, seminar participants at the University of Auckland, Massey University (Palmerston North and Albany Campuses), Texas Tech University and participants at the 2004 Financial Management Association Annual Meeting and 2005 Northern Finance Association Meeting for valuable comments and suggestions.

* Corresponding author: Department of Finance, John Molson School of Business, Concordia University, Montreal, Quebec H3G 1M8, Canada; Phone: (514) 848-2424x2909; E-mail: bhabra@jmsb.concordia.ca


We investigate the determinants and consequences of compliance with the Dey Committee recommendations encouraging greater board independence in Canada. Companies that acted on this recommendation appear to have done so to improve their performance and not for cosmetic purposes. Poorly performing firms that modified their boards experienced a greater increase in performance compared to those that did not. Overall, it appears that the primary function of the Dey Report was to refocus firms' attention on the quality of board monitoring, particularly those with poor relative performance.