The Australian Government has recently published a paper that reviews Corporate Governance compliance in relation to financial performance. Follow the link for the paper (http://www.treasury.gov.au/contentitem.asp?NavId=035&ContentID=1495). Essentially the paper confirms the general view that strong corporate governance leads to better financial returns. "Our results suggest that companies demonstrating greater compliance with the ASX Corporate Governance Principles outperform less compliant companies in each of these three financial areas" (of shareholder performance, operating performance and one year sales growth for the top 300 Australian listed companies.
In a paper published by Julie Hudson (UBS Investment Bank, 2008) "Coporate Governance and Capital Markets"; the connection is again confirmed. "Weak corporate governance is accompanied by an increased risk of potentially unwelcome surprises" and guides investors to avoid companies with weak governance in terms of portfolio selection.
In my own experience as a Board Director, I would have to agree with the research. Companies exhibiting stong Board Governance and adherence to Governance principles such as those published by the ASX or AICD were on whole better performing than those that were "less compliant".
Given the strong impirical and "personal practical" evidence I am an advocate of professional Board Governance.