Board composition and firm performance in the Netherlands

We analyze the relationship between performance and board composition of Dutch listed firms. Since the Netherlands has a two-tier board structure, we analyze both the impact of the size of the management board and the supervisory board. The supervisory board plays a role in (anti-) investor protection in the Dutch corporate governance system. Therefore, we use indicators of corporate governance as instrumental variables. We find that the size of the management board is not determining firm performance. We do, however, find support for a negative relationship between the size and composition (number of outsiders) of the supervisory board and firm performance