Search results

1 – 10 of over 2000
To view the access options for this content please click here
Article
Publication date: 7 November 2008

Christopher Pass

A revised Combined Code on corporate governance was introduced in the UK in 2003 which set out a number of new provisions relating to the composition of the company's…

Downloads
2810

Abstract

Purpose

A revised Combined Code on corporate governance was introduced in the UK in 2003 which set out a number of new provisions relating to the composition of the company's Board of Directors and its main Committees. The Code gives greater prominence to the role of non‐executive directors in a company's corporate governance structures and decision‐making processes. This paper examines the main provisions of the Code relating to non‐executive directors and the emphasis it places on the importance of non‐executives being “independent”.

Design/methodology/approach

The paper discusses the main issues concerning the effectiveness of non‐executive directors, drawing in part of the evidence provided by a sample of large UK companies.

Findings

Most companies “comply” with the Code's requirements relating to non‐executive directors and endorse the positive contribution they make to Board and Committee work.

Practical implications

Considers the pros and cons of the role of non‐executives and the issue of what constitutes “ independency”.

Originality/value

This is one of the first papers to examine the provisions of the new Code relating to non‐executive directors.

Details

Business Strategy Series, vol. 9 no. 6
Type: Research Article
ISSN: 1751-5637

Keywords

To view the access options for this content please click here
Article
Publication date: 28 January 2014

Pieter-Jan Bezemer, Stefan Peij, Laura de Kruijs and Gregory Maassen

This study seeks to explore how non-executive directors address governance problems on Dutch two-tier boards. Within this board model, challenges might be particularly

Downloads
4502

Abstract

Purpose

This study seeks to explore how non-executive directors address governance problems on Dutch two-tier boards. Within this board model, challenges might be particularly difficult to address due to the formal separation of management boards' decision-management from supervisory boards' decision-control roles.

Design/methodology/approach

Semi-structured interviews and a questionnaire among non-executive directors provide unique insights into three major challenges in the boardrooms of two-tier boards in The Netherlands.

Findings

The study indicates that non-executive directors mainly experience challenges in three areas: the ability to ask management critical questions, information asymmetries between the management and supervisory boards and the management of the relationship between individual executive and non-executive directors. The qualitative in-depth analysis reveals the complexity of the contributing factors to problems in the boardroom and the range of process and social interventions non-executive directors use to address boardroom issues with management and the organization of the board.

Practical implications

While policy makers have been largely occupied with the “right” board composition, the results highlight the importance of adequately addressing operational challenges in the boardroom. The results emphasize the importance of a better understanding of board processes and the need of non-executive directors to carefully manage relationships in and around the boardroom.

Originality/value

Whereas most studies have focussed on regulatory initiatives to improve the functioning of boards (e.g. the independence of the board), this study explores how non-executive directors attempt to enhance the effectiveness of boards on which they serve.

To view the access options for this content please click here
Article
Publication date: 18 January 2016

Niamh M. Brennan, Collette E. Kirwan and John Redmond

The purpose of this paper is to understand the influence of information and knowledge exchange and sharing between managers and non-executive directors is important in…

Downloads
2017

Abstract

Purpose

The purpose of this paper is to understand the influence of information and knowledge exchange and sharing between managers and non-executive directors is important in assessing the dynamic processes of accountability in boardrooms. By analysing information/knowledge at multiple levels, invoking the literature on implicit/tacit and explicit information/knowledge, the authors show that information asymmetry is a necessary condition for effective boards. The authors introduce a conceptual model of manager-non-executive director information asymmetry as an outcome of the interpretation of information/knowledge-sharing processes amongst board members. The model provides a more nuanced agenda of the management-board information asymmetry problem to enable a better understanding of the role of different types of information in practice.

Design/methodology/approach

The analysis of information/knowledge exchange, sharing and creation and the resultant conceptual model are based on the following elements: manager-non-executive director information/knowledge, management-board information/knowledge and board dynamics and reciprocal processes converting implicit/tacit into explicit information/knowledge.

Findings

The paper provides new insights into the dynamics of information/knowledge exchange, sharing and creation between managers and non-executive directors (individual level)/between management and boards (group level). The authors characterise this as a two-way process, back-and-forth between managers/executive directors and non-executive directors. The importance of relative/experienced “ignorance” of non-executive directors is revealed, which the authors term the “information asymmetry paradox”.

Research limitations/implications

The authors set out key opportunities for developing a research agenda from the model based on prior research of knowledge conversion processes and how these may be applied in a boardroom setting.

Practical implications

The model may assist directors in better understanding their roles and the division of labour between managers and non-executive directors from an information/knowledge perspective.

Originality/value

The authors apply Ikujiro Nonaka’s knowledge conversion framework to consider the transitioning from individual implicit personal to explicit shared information/knowledge, to understand the subtle processes at play in boardrooms influencing information/knowledge exchange, sharing and creation between managers and non-executive directors.

Details

Accounting, Auditing & Accountability Journal, vol. 29 no. 1
Type: Research Article
ISSN: 0951-3574

Keywords

To view the access options for this content please click here
Article
Publication date: 1 March 2005

Andrew Chambers

Aims to consider whether non‐executive directors add value.

Downloads
2891

Abstract

Purpose

Aims to consider whether non‐executive directors add value.

Design/methodology/approach

A discussion based on current and recent trends in thinking about the role of non‐executive directors.

Findings

Considering the effect of the non‐executive director is not quite the same as addressing “the effective non‐executive director”. Do non‐executive directors have any effect and, if so, what are the effects and to what extent? Of course, positive answers to these questions would suggest tests to apply in determining whether someone has what it takes to make an effective contribution as a non‐executive director. This would also assist in determining the scope of the evaluation of the performance of each non‐executive director – which is now very much part of the 2003 Combined Code on Corporate Governance.

Originality/value

This paper offers useful insights into the roles of non‐executive directors.

Details

Measuring Business Excellence, vol. 9 no. 1
Type: Research Article
ISSN: 1368-3047

Keywords

To view the access options for this content please click here
Article
Publication date: 1 April 2001

Charlie Weir and David Laing

A number of Committees have been set up in recent years to investigate the governance of UK quoted companies. The key one was the Cadbury Committee, which recommended a…

Downloads
10421

Abstract

A number of Committees have been set up in recent years to investigate the governance of UK quoted companies. The key one was the Cadbury Committee, which recommended a number of governance structures as examples of best practice. These included the separation of the posts of CEO and chairman, a significant representation of non‐executive directors, the importance of non‐executive director independence and the setting up of board subcommittees. This study finds that there has been widespread adoption of the recommended governance structures. However, there is no clear relationship between governance structures and corporate performance. This raises questions about the most effective type of governance mechanism and whether or not the prescriptive recommendations of Cadbury should be replaced with a more flexible approach.

Details

European Business Review, vol. 13 no. 2
Type: Research Article
ISSN: 0955-534X

Keywords

To view the access options for this content please click here
Article
Publication date: 1 June 2004

Christopher Pass

In the 1990s various committees (Cadbury, Greenbury, Hempel) reported on governance issues, including the role played by non‐executive directors in promoting “best…

Downloads
11440

Abstract

In the 1990s various committees (Cadbury, Greenbury, Hempel) reported on governance issues, including the role played by non‐executive directors in promoting “best practice”. Following public concern at cases of “excessive” pay awards to executive directors and financial irregularities the government has recently appointed the Higgs Committee to review again the contribution of non‐executive directors. This paper presents an empirical study of the involvement of non‐executives in large UK companies, assesses the extent to which these companies now “conform” to the recommendations of “best practice” proposed by the earlier committees and looks at the general and specific controversies surrounding the employment of non‐executives as part of companies corporate governance structures.

Details

Corporate Governance: The international journal of business in society, vol. 4 no. 2
Type: Research Article
ISSN: 1472-0701

Keywords

To view the access options for this content please click here
Article
Publication date: 1 June 1998

Thomas Clarke

Examines the role of non‐executive directors. Argues that there is universal agreement on the need for outsiders to be involved in company direction and that shareholders…

Downloads
5841

Abstract

Examines the role of non‐executive directors. Argues that there is universal agreement on the need for outsiders to be involved in company direction and that shareholders are not able to provide the necessary checks and balances to supervise board activities. Examines research on the system of non‐executive directors. Argues that there is a need to develop procedures to select non‐executives that are rigorous and add value. Concludes that non‐executive directors will have increasing influence on company direction.

Details

Career Development International, vol. 3 no. 3
Type: Research Article
ISSN: 1362-0436

Keywords

To view the access options for this content please click here
Article
Publication date: 1 September 2006

Christopher Pass

The purpose of this paper is to investigate the extent to which a sample of large UK companies comply with the main provisions of the revised 2003 Combined Code on…

Downloads
5060

Abstract

Purpose

The purpose of this paper is to investigate the extent to which a sample of large UK companies comply with the main provisions of the revised 2003 Combined Code on corporate governance. The new Code incorporates a number of key principles of compliance with regard to the roles of a company's chairperson and chief executive, the composition of its Board of Directors and the composition of the Board's three main committees – the Nominations, Remuneration and Audit Committees. Companies are expected to fully comply with the provisions of the Code or proffer an “acceptable” explanation as to why they have not done so under the Code's “comply or explain” philosophy. The Code gives greater prominence to the role of non‐executive directors in a company's corporate governance structures and decision‐making processes and emphasizes the importance of non‐executive directors being “independent”.

Design/methodology/approach

The paper looks at the extent of compliance in respect of the governance provisions referred to above presenting a survey of 50 large UK companies reporting in 2005 drawn (at random) from the FTSE‐250 listing.

Findings

A total of 17 companies fully complied throughout their reporting year. Twenty‐two companies took action to comply or proffered “acceptable” explanations as to why not during their reporting year. Eleven companies, however, remained in breach of the Code on one or more counts.

Practical implications

The paper discusses some of the issues which have arisen concerning the effectiveness of non‐executive directors and addresses the controversial matter of what constitutes “independency”.

Originality/value

This is one of the first papers to present an empirical study of the initial impact of the new Code.

Details

Managerial Law, vol. 48 no. 5
Type: Research Article
ISSN: 0309-0558

Keywords

To view the access options for this content please click here
Article
Publication date: 1 June 1999

David Laing and Charles M. Weir

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…

Downloads
6574

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.

Details

Management Decision, vol. 37 no. 5
Type: Research Article
ISSN: 0025-1747

Keywords

To view the access options for this content please click here
Article
Publication date: 1 January 2006

David Treadwell

The purpose of the paper is to provide an informed but personal view on the debate surrounding the role of the non‐executive director and the board.

Downloads
2638

Abstract

Purpose

The purpose of the paper is to provide an informed but personal view on the debate surrounding the role of the non‐executive director and the board.

Design/methodology/approach

The approach is that of a practitioner recruiting non‐executive directors. The author offers a personal view.

Findings

The author has had extensive discussions with both chairmen and non‐executive directors of FTSE companies and the views in the paper reflect these discussions.

Originality/value

The value of the paper is to stimulate debate and to promote a realistic climate within which business can operate effectively.

Details

Corporate Governance: The international journal of business in society, vol. 6 no. 1
Type: Research Article
ISSN: 1472-0701

Keywords

1 – 10 of over 2000