2011
DOI: 10.1111/j.1468-5957.2011.02255.x
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Board Characteristics and Profit Efficiency in the United Kingdom Life Insurance Industry

Abstract: This paper examines the effects of corporate governance mechanisms (measured by a set of board characteristics) on the profit efficiency of United Kingdom (UK) life insurance firms. A parametric 'stochastic frontier' approach is used to compute profit efficiency scores and second-stage regression models are estimated to test the influence of governance mechanisms on these efficiencies. We find that, viewed in isolation, board characteristics tend to have little effect on firm efficiency in the UK life insuranc… Show more

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Cited by 73 publications
(108 citation statements)
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References 86 publications
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“…9 Huang et al (2011) examine the U.S. Property and Liability industry during the 2000-2007 period, revealing a significant relationship between cost efficiency and corporate governance. 10 In contrast, Hardwick et al (2011) find no evidence to support the argument that governance mechanisms such as a high proportion of actuaries on the board, the existence of an audit committee, and CEO duality have significant effects on the profit efficiency of U.K. life insurers. 11 In another study of the U.K. insurance sector, Diacon and O'Sullivan (1995) find that CEO tenure and formal governance factors, such as the number of directors and the existence of audit and remuneration committees, have a nonlinear impact on most of their performance measures, and they conclude that too much governance may be harmful.…”
Section: Corporate Governance and Internal Controlmentioning
confidence: 49%
“…9 Huang et al (2011) examine the U.S. Property and Liability industry during the 2000-2007 period, revealing a significant relationship between cost efficiency and corporate governance. 10 In contrast, Hardwick et al (2011) find no evidence to support the argument that governance mechanisms such as a high proportion of actuaries on the board, the existence of an audit committee, and CEO duality have significant effects on the profit efficiency of U.K. life insurers. 11 In another study of the U.K. insurance sector, Diacon and O'Sullivan (1995) find that CEO tenure and formal governance factors, such as the number of directors and the existence of audit and remuneration committees, have a nonlinear impact on most of their performance measures, and they conclude that too much governance may be harmful.…”
Section: Corporate Governance and Internal Controlmentioning
confidence: 49%
“…These variables have been shown by prior research to be associated with firms' performance (e.g. Adams and Jiang, 2016;Hardwick et al, 2011) and so moderate the CEO−performance relation. We perform the Hausman test for endogeneity to confirm that the OLS estimates are consistent with an instrumental variable (IV) approach.…”
Section: Modelmentioning
confidence: 89%
“…Cadbury [49] emphasised the need for UK corporate board to have committees particularly audit committee (AUDCOM) and Agency Theory supported such suggestion. Therefore, similar to UK study of Weir et al [50], only audit committee was considered in this study. In line of Haniffa et al…”
Section: Data Collectionmentioning
confidence: 99%