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The results of a study on the cost efficiency of expanding and marketing bank services through branching rather than through the formation of new banks are given. Using detailed cost and bank service output data from a large sample of bank branches across Canada, several issues of interest to bank management and marketing officials are addressed. The evidence presented indicates that some Canadian banks may not be benefiting fully from their ability to rationalise their activities. Retail and commercial banking branches operate according to different technologies for producing financial products and services. Small commercial branches show less potential for economies of scale than retail branches. However, this potential does not appear to shrink as rapidly as it does for retail branches. Finally, both retail and commercial branches show benefits from specialisation. As a result of these technological characteristics, banks may be well advised to maintain their marketing strategy of segregating their retail business from commercial business.

This study sets out to examine whether small and mid‐cap fund performance is related to fund manager human capital characteristics including tenure, investment experience, education (MBA designation), professional training (CFA), and gender.

Based on a sample of 1,004 small and mid‐cap equity funds identified on the Morningstar database as of 31 December 2005, several statistical tests were applied which consider fund performance, risk, expenses, and turnover simultaneously.

Depending on the benchmark, an optimal size of managed mutual funds is determined that ranges between $US1.43 billion and $US3.89 billion.

The results suggest that there are some systematic cross‐sectional differences in fund performance that can be attributed to differences in managerial human capital characteristics.

The purpose of this paper is to examine the relationship between board alignment with shareholder interests using a new measure of perceived board effectiveness, which is designed to capture the alignment of the directors with the interests of shareholders.

Specifically, the paper looks at the Rotman/Clarkson (CCBE²) Canadian Board Shareholder Confidence Index as the measure of shareholder's perceptions of the board's efficiency as it relates to company performance. The index is ostensibly designed to capture the essential factors affecting shareholders' confidence in the boards' abilities to fulfill their duties. The CCBE² Board Shareholder Confidence Index assigns scores to companies based on the consideration of the following three perspectives: potential of individual board members; potential of the board as a group and past practices of the board. The measure of performance is the firm's Economic Value Added™ (ER), which is a metric for a company's ability to generate economic profits that enhance the wealth for shareholders.

Based on regression analysis, it is found that high shareholder confidence index values are generally associated with higher ER, although the relationship is not monotonic for higher graded boards. This suggests that while highly graded boards are generally beneficial, there may be diminishing returns to efforts to design “optimal” boards in the sense of their alignment with shareholder interests. The performance gap between firms with high vs low expected agency costs as reflected in terms of higher differentials between board members' interests alignments with those of shareholders amounts to almost 30 percent.

This paper is the first study to appear that looks at how a new, comprehensive measure of board alignment with shareholder interests relates to company performance. The findings should be of considerable interest to investors, policy makers, and firms looking at the incentive structures for directors, and how aligning directors interests with those of shareholders can create economic value for firms.