The effect of interlocks and recommendations of corporate governance on the performance of companies in the Ibex 35

Abstract

The aim of this paper is to analyse whether a greater number of interlocks on the board and compliance with the majority of corporate governance recommendations have any effect on the results of IBEX 35 companies. In order to do this, we will focus on the theory of resource dependence and propose two hypotheses which will collate the effect of interlocks and the compliance of recommendations on the performance of these companies. This effect will be measured using ROA and ROE on a sample of the 35 companies that comprised the IBEX during 2014. Using this, the results show that interlocks have no significant effect on the performance of businesses and the compliance of recommendations has a negative effect.