Investor-Driven Governance Standards and Firm Value

We ope-rationalize a corporate governance framework developed and promoted by a diverse, influential group of diverse institutional investors. We find positive associations between consistency with the proposed framework and firm value for smaller firms in recent years, and negative associations for S&P 500 firms in recent years. We detect some evidence of improved monitoring outcomes for firms whose governance provisions are more consistent with provisions eventually included in the framework. However, we do not find that measures of consistency with the framework are more strongly associated with firm outcomes than the much simpler entrenchment index is.