An Evolutionary Perspective on Corporate Governance applying Firm Life Cycle Theory

Abstract: This paper investigates whether the corporate governance of Swedish firms evolves along with their corporate life cycle stage. We find both quantitatively and qualitatively that corporate governance can be seen to follow the firm's life cycle stage, in particular when considering firm-specific characteristics that capture certain elements of the firm life cycle. The study is conducted through a mixed methods approach. First, a cross-sectional quantitative study based on small, mid, and large cap companies listed on the NASDAQ OMX Stockholm 2011. The methodologies of Anthony & Ramesh (1992) and Dickinson (2011) were used to classify each company in the sample to the corresponding life cycle stage. Second, a retrospective qualitative case study based on interviews with both representatives from the firm and external professionals was undertaken to examine how the development of the case company from its incorporation until today have affected its corporate governance. For this part, the conceptual framework of Filatotchev et al. (2006) and a multi-theoretic view including principal-agency, resource dependency and institutional theory were used.