Change search
ReferencesLink to record
Permanent link

Direct link
Board Composition and Financial Distress: An Empirical evidence from Sweden and Denmark
Umeå University, Faculty of Social Sciences, Umeå School of Business and Economics (USBE), Business Administration.
Umeå University, Faculty of Social Sciences, Umeå School of Business and Economics (USBE), Business Administration.
2014 (English)Independent thesis Advanced level (professional degree), 20 credits / 30 HE creditsStudent thesis
Abstract [en]

Recent failure of such companies as Enron, Worldcom and Parmala showed that there are internal reasons contributing to company’s financial distress. Financial distress is a condition when a company fails to meet its debt obligations. Board of directors is liable for long-term decisions and their ineffective work in monitoring and controlling management can influence companies’ performance. With that in mind, in this degree project, we would like to answer the following research question: “What is the relationship between characteristics of Board and probability of financial distress, measured by Altman’s Z-score models in Sweden and Denmark?”


The epistemological and ontological choices for our study were positivism and objectivism with deductive approach. We have calculated Z-scores of Swedish and Danish companies in order to detect distressed and healthy companies. Further on, the information about board composition in each company was collected; mainly we were interested in board independence, board size, board ownership, COB ownership, CEO duality and employee representatives.


In order to examine if there is a relationship between board composition and financial distress, we have done Multiple and Binary Regression analyses. Based on the results we can state that board independence, board ownership and employee representatives and market capitalization (control variable) have significant relationship with probability of financial distress. Our study is interesting since we have looked at employee representatives, as a board characterectic that is specific for Nordic countries and that was not studied before. In addition, we have found that there is no CEO duality in Sweden and Denmark, since all companies in our sample followed the Companies’ Acts. COB ownership, the additional variable we wanted to test and board size have shown no significant relationship.

Place, publisher, year, edition, pages
2014. , 94 p.
Keyword [en]
board composition, financial distress, board independence, board size, board ownership, CEO duality, COB ownership, employee representatives, Altman’s Z- score, market capitalization, Sweden, Denmark.
National Category
Business Administration
URN: urn:nbn:se:umu:diva-90935OAI: diva2:732206
Educational program
International Business Program
2014-06-02, s310, Umeå, 15:00 (English)
Available from: 2014-07-03 Created: 2014-07-03 Last updated: 2014-07-03Bibliographically approved

Open Access in DiVA

FD and BC(2356 kB)486 downloads
File information
File name FULLTEXT01.pdfFile size 2356 kBChecksum SHA-512
Type fulltextMimetype application/pdf

Search in DiVA

By author/editor
Akhmetova, AmiraBatomunkueva, Yulia
By organisation
Business Administration
Business Administration

Search outside of DiVA

GoogleGoogle Scholar
Total: 486 downloads
The number of downloads is the sum of all downloads of full texts. It may include eg previous versions that are now no longer available

Total: 390 hits
ReferencesLink to record
Permanent link

Direct link