Studying the relation between Corporate Governance Mechanisms on the Amount of Created Shareholders Value

This study is aimed to provide evidence on the relationship between the corporate Governance mechanisms and the amount of created shareholders value. Independent variables of the study are corporate Governance mechanisms, which are examined from four aspects, including number of institutional investors, investment ratio of institutional investors, independence of the members of the board of directors, and the ratio of nonexecutive directorse. The dependent variable of the study is the created shareholders value, which is measured based on the Pablo Fernandez Model. Pablo Fernandez believes that since book values are used in the calculation of the Economic Value Added (EVA), the calculations lack a sufficient reliability and may result in decision makers’ mistakes. Pablo Fernandez proposed a model in which market values of shares are used instead of book values. The control variable of the study is the size of the company. In this study, the dependent variable is tested with a oneyear interval in comparison with the independent variables. The statistical sample was selected based on the systematic deletion and the application of limitations, resulting in the selection of 98 corporations listed in the Tehran Stock Exchange (TSE) during 2004-08 For testing the relation between independent and dependent variable of the study, simple and multiple regression methods were used. Generally, the results of the study indicate that there is no significant relationship between the corporate Governance mechanisms and the amount of created shareholders value.