The Relationship between Corporate Governance and Created Shareholder Value

The research treat the proportion of institutional investors, institutional investors concentration, the directors of board compensation, the proportion of outside directors and CEO non­duality as corporate governance mechanisms with created shareholders value (CSV) as performance measurement. To perform this research, the data for 63 publicly listed firms in Tehran Stock Exchange during 2003-2009 were used. For this purpose, sample firms were divided in two group. Group1 including the firms were created value (the shareholder return exceeds the required return), group2 including the firms were destroyed value (the shareholder return is less than the required return). The research hypotheses were tested by using regression analysis and independent t-test, findings showed that: In firms that were created value, we detected a direct significant relationship between directors of board compensation and CSV. In firms that were destroyed value, we detected a direct significant relationship between institutional investors concentration and CSV. In firms that were destroyed value, we detected an inverse significant relationship between directors of board compensation and proportion of outside directors with CSV. We did not detect a significant relationship between proportion of institutional investors and CEO non-duality with CSV.