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Governance structures, size and corporate performance in UK firms

David Laing (Research Assistant, Aberdeen Business School, The Robert Gordon University, Aberdeen, UK)
Charles M. Weir (Reader in Economics, Aberdeen Business School, The Robert Gordon University, Aberdeen, UK)

Management Decision

ISSN: 0025-1747

Article publication date: 1 June 1999

Abstract

Analyses the extent of Cadbury compliance and its impact on corporate performance in the UK. Comparing 1992 and 1995, we find that UK public companies have, in general, complied with the Cadbury Committee’s Code of Best Practice and have adopted the recommended governance structures. However, compliance is more common among larger firms. Thus we find that duality is less common, firms tend to have more than three non‐executive directors and that there has been an almost universal adoption of board subcommittees such as the remuneration and audit committees. However, little evidence is found to suggest either that the board characteristics recommended by Cadbury lead to improved performance or that moving towards them improves performance. The only governance mechanism which does positively affect performance is the presence of remuneration and audit committees.

Keywords

Citation

Laing, D. and Weir, C.M. (1999), "Governance structures, size and corporate performance in UK firms", Management Decision, Vol. 37 No. 5, pp. 457-464. https://doi.org/10.1108/00251749910274234

Publisher

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MCB UP Ltd

Copyright © 1999, MCB UP Limited