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- Title
Discussion of The Increasing Use of Non-Executive Directors: Its Impact on UK Board Structure and Governance Arrangements.
- Authors
Conyon, Martin J.
- Abstract
The article comments on a paper focusing on the increasing use of non-executive directors in British films, by Steven Young. According to the author, the paper proceeds by empirically modeling what economic factors are likely to determine the fraction of outsiders on the board and how companies then adjust this metric if it is too low or too high. The paper examines whether changes in the proportion of non-executive directors is related to an indicator variable signifying that in the past, firms had proportionately too many executive directors. It also tests whether the increasing use of nonexecutive directors has any spillover effects on other governance arrangements that may already be in place to attenuate the agency problem between owners and managers. The evidence suggests that there are no changes in managerial ownership or dividend arrangements following the increased use of nonexecutive directors. The author concludes that the paper provides a coherent perspective as to what determines the use of non-executive directors on boards and identifies those factors that shape the evolution of the board. As with all good research papers it opens many potential avenues for future research.
- Subjects
UNITED Kingdom; CORPORATE directors; YOUNG, Steven; INDUSTRIAL management; CORPORATE governance; EXECUTIVES
- Publication
Journal of Business Finance & Accounting, 2000, Vol 27, Issue 9/10, p1343
- ISSN
0306-686X
- Publication type
Article
- DOI
10.1111/1468-5957.00359