How to collect Corporate Governance Data (1)

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It is a hard work to collect corporate governance data since it takes at least 3 months time to collect a good dataset. It takes me 3-4 months time to collect the S&P 500 firms from 2001-2005, and one more month to clean the dataset. The data collecting is not that difficult but extremely boring, as you are easy to fall asleep. The data cleaning stage is difficult if you don't use the correct and consistent method to collect your data. Since you have to double check whether the director information has changed, for instance, the name has change from James K. Meckling to James Kim Meckling. A minor change can bring hazard to your data and analysis.

To ensure the consistence of the dataset, my brother and I and some of my friends in the IT industry develop a system called Corporate Governance Data Collection System. The first feature of the system is the consistence of the director information over time. For example, if James K. Meckling appears in Year 2001, the system directly import his id to Year 2002 if he appears in Year 2002. This reduces duplicated information, such as Name and Gender etc, in the datasets and maintain the consistence of the director information.

Why collect governance data at the director level? -- To save your time in the future.

One common question for Governance Research during the data collection stage is that, "Why don't we collect the degree of board size and independence directly, but spending time to collect every information for the director?" I argue that although this is simpler way to collect governance data, it does not guarantee the future research of this dataset. For example, the board size or board independence is used as independent variables in one research project. If some researchers feel that the project should add the Director Turnover variable to the regression model, it requires another 3 months time to collect the Turnover data. That means, if we collect the governance data in the director level now, it allows us to save time in the future.

to be continued.....