Consequences of the presence of politicians or employees in the board of directors on the efficiency of firms.

Summary This thesis studies the impact of board composition on the financial performance of a company. It is composed of three chapters. In the first chapter, we review the literature on boards of directors. We point out the evolution of corporate governance over the last decades, and show how board effectiveness has become a major topic in this field of research and an important concern of shareholders and regulators. In particular, after presenting the theoretical framework of governance, we present the results of academic articles studying the impact of board composition on firm performance. In the second and third chapters, we study the impact of the presence of different types of directors on the board. In the second chapter, we propose a theoretical model to try to understand and determine the impact of employee representation on the board of directors on the firm's shareholder value and on its investment horizon. Our results suggest that employee representation can be viewed as a choice between liquidity and information for shareholders. We show that when employee representatives sit on the board of directors of a firm, the firm is more likely to invest in long-term projects than a firm without employee representation. We also show that since employees have access to valuable internal information, their presence on the board of directors can increase the shareholder value of the firm. Thus, we propose a model of employee representation consistent with some empirical studies. In the third chapter, we empirically study the impact of political connections on the interest rate of bank loans using a sample of loans involving firms in several countries. While this topic has already been widely addressed, we propose a new definition of political connection that we subdivide into two categories, depending on the high or low media exposure of politicians. The most high-profile politicians are also those for whom the risk of being suspected of conflict of interest or ethical misconduct is the greatest, and for whom the cost of a scandal is the highest. We therefore discriminate between political connections involving high-profile politicians and those involving lower-level politicians. This division is based on the assumption that the most exposed politicians have the most to lose from a scandal, have the least room for maneuver as business leaders, and are therefore the least likely to impact firm performance. Our results support the relevance of such a redefinition of the political connection according to the visibility of the politicians involved. In particular, we show that politically connected firms that borrow from politically connected banks do so at significantly lower rates than unconnected firms, and that this effect is larger when the borrower's connection is through a less exposed politician. Our results suggest that the effect is even stronger if the bank is also connected through a less exposed politician. Furthermore, we show that politically connected firms borrow significantly less from banks connected through a highly exposed politician. Finally, our results suggest that this effect is stronger in the run-up to elections, a time when it is particularly costly for a politician to be suspected of misconduct.