In recent years some activists have advanced proposals to reform corporate boards, notably their structure and process, to assure desirable corporate governance. The empirical question, however, is whether such formal board changes would guarantee good governance. This paper examines this issue by studying the differences in the board size and board composition of 21 pairs of failed and non-failed firms. The results suggest that the non-failed retailing firms, as compared to failed ones, tend to have bigger boards within the size range suggested by the activists. The differences in the percent of outsider directors and multiple offices held by C.E.0.s between the failed and non-failed firms were not significant. Implications of the results for the evaluation of board reforms are discussed.

In most studies of ownership and firm performance, researchers have assumed different forms of ownership do not interact in their effect on firm strategy or performance. Focusing on the role of institutional owners, this study poses two related questions: (1) What are the relationships between outside institutional shareholdings, on the one hand, and a firm's capital structure and performance, on the other? and; (2) Does the size of stockholdings by corporate executives, family owners, and insider‐institutions modify those relationships? The data, collected from 40 pairs of manufacturing firms selected from as many industries over a 3‐year period, shows that the size of outside institutional stockholdings has a significant effect on the firm's capital structure. We have also found that family and inside institutional owners' shareholdings moderate the relationship between outside institutional shareholdings and capital structure. Likewise, corporate executives' shareholdings supplement the relationship between outside institutional shareholdings and firms' performance. These findings suggest that internal and external coalitions interact with each other to influence the firm's conduct.

Every organization reflects the background of its most powerful top managers; what the organization does and the way it carries out its functions could be explained, in part at least, by the profile of its upper echelon. The relationship between the strategic orientation of three tobacco companies, the proportion of executives recruited from outside the company and the proportion of executives from different functional backgrounds in the upper echelon of the companies is the focus of this paper.

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