This paper examines the nature and extent of potential linkages between corporate governance characteristics and bankruptcy filing decisions. To test the paper's research hypotheses and follow prior related literature, a sample of financially distressed firms was formed and matched with a group of financially healthy firms in the US between 2001 and 2003. Results show that in addition to lower business and financial health indicators faced by financially distressed firms compared to their financially healthy counterparts, the former group also faced higher director turnover and shorter outside director tenure. In addition, the results indicate that interactions between two or more corporate governance characteristics could have a significant impact on the bankruptcy filing decision, thus suggesting that a multi-theory foundation for governance research could be warranted in the future. Further research is needed to investigate in more depth how boards and management work together, change, make decisions and manage their reputations and careers, not only in the case of financial distress but also in normal business situations.
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