Financial distress and corporate governance: An empirical analysis

Fathi Elloumi, Jean Pierre Gueyié

Research output: Contribution to journalJournal Articlepeer-review

169 Citations (Scopus)


Relationships between corporate governance characteristics and financial distress status are examined for a sample of Canadian firms. Results from logit regression analysis of 46 financially distressed and 46 healthy firms lead us to conclude that the board of director's composition explains financial distress, beyond an exclusive reliance on financial indicators. Additionally, supplemental results indicate that outside directors’ ownership and directorship affect the likelihood of financial distress. Furthermore, splitting financially distressed firms based on chief executive officer change as a proxy of turnaround strategies provides useful insights on corporate governance characteristics in financial distress.

Original languageEnglish
Pages (from-to)15-23
Number of pages9
JournalCorporate Governance: The international journal of business in society
Issue number1
Publication statusPublished - 1 Mar. 2001


  • Audit committees
  • Corporate governance
  • Directors
  • Financial management
  • Top management


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