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

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.