Abstract
This paper studies the effect on company performance of appointing non-executive directors that are also executive directors in other firms. The analysis is based on a new panel dataset of UK companies over 2002–2008. Our findings suggest a positive relation between the presence of these non-executive directors and the accounting performance of the appointing companies. The effect is stronger if these directors are executive directors in firms that are performing well. We also find a positive effect when these non-executive directors are members of the audit committee. Overall, our results are broadly consistent with the view that non-executive directors that are executives in other firms contribute to both the monitoring and advisory functions of corporate boards.
Original language | English |
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Pages (from-to) | 25–45 |
Number of pages | 21 |
Journal | Review of Quantitative Finance and Accounting |
Volume | 46 |
Issue number | 1 |
Early online date | 10 May 2014 |
DOIs | |
Publication status | Published - Jan 2016 |
Keywords
- Executive directors
- Non-executive directors
- Company performance