There are three alternative ways of interpreting the superior return performance of companies with strong shareholder rights.
First, these results could be sample-period specific; hence companies with strong shareholder rights during the current decade of
2000s may not have exhibited superior return performance. In fact, in a very recent paper, Core, Guay and Rusticus (2005) carefully
document that in the current decade share returns of companies with strong shareholder rights do not outperform those with
weak shareholder rights. Second, the risk-adjustment might not have been done properly; in other words, the governance factor
might be correlated with some unobservable risk factor(s). Third, the relation between corporate governance and performance