Corporate governance and the role of non‐executive directors in large UK companies: an empirical study

Pass, Christopher

doi:10.1108/14720700410534976

Cited by 78 publications

(100 citation statements)

References 4 publications

Supporting

Mentioning

Contrasting

Unclassified

Order By: Relevance

“…The introduction of the Combined Code resulted in presence of independent non-executives for a minimum of half of the seats on the board, separation of chairperson and CEO's positions, ensuring that the majority of directors in the nomination committee are indecent and developing independence of audit and the remuneration committees. Similar actions can be found in other countries and their recommendations on board composition and independence (Aguilera et al, 2006;Pass, 2004).…”

Section: The Need Of Non-executives Director (Ned)mentioning

confidence: 83%

“…From a legal and commercial viewpoint, NEDs represent an essential guarantee of integrity and accountability of an organisation (Pass, 2004). The independent judgment provided by non-executives safeguards the interests of a company's shareholders.…”

Section: The Need Of Non-executives Director (Ned)mentioning

confidence: 99%

“…Three broad conclusions can be observed from this body of research. First, non-executive (mostly independent) directors are essential for the provision of monitoring of a company's financial reporting practices (Aguilera et al, 2006;Pass, 2004;Zattoni & Cuomo, 2010). Secondly, the protection of shareholders' interests in key board outcomes including CEO substitution, reaction to potential takeovers, implementation of anti-takeover defences and top management's compensation has been enhanced by non-executive directors (Hermalin & Weisbach, 2001;Huse, 2005).…”

Section: The Need Of Non-executives Director (Ned)mentioning

confidence: 99%

“…Consequently, reinforcement of the codes and rules for non-executive directors has occurred. In the context of the US, the Sarbanes-Oxley Act (2002) and the new New York Stock Exchange listing rules (2003) assert that publicly traded companies should have boards composing of a majority of independent directors and the same goes for the audit committees which should be made up of independent directors entirely (Aguilera et al, 2006;Pass, 2004;Sarbanes, 2002;Zattoni & Cuomo, 2010;Alshareef & Sandhu, 2015). In the UK context, changes in the board composition recommendations can be traced back to the review undertaken by Sir Higgs in 2003.…”

Section: The Need Of Non-executives Director (Ned)mentioning

confidence: 99%

“…Finally from a structural point of view, non-executives are often required to guide companies through a period of corporate transitions (e.g. changes in ownership, re-positioning of the business) (Ayuso & Argandoña, 2009;Pass, 2004;Zattoni & Cuomo, 2010).…”

Section: The Need Of Non-executives Director (Ned)mentioning

confidence: 99%

See 4 more Smart Citations

Adoption of Corporate Social Responsibility: Board Competencies and Roles

Alshareef¹,

Sandhu²

2015

IJBM

View full text Add to dashboard Cite

This study aims to discover non-executive directors' competencies that important to improve their roles towards the adoption of Corporate Social Responsibility (CSR). To begin with, the review of the existing body of literature on the topic of Corporate Governance (CG) codes and the survey of numerous postulations offered is conducted. A qualitative interpretive approach is adopted, based on in-depth interviews conducted with board and management levels of the two companies operate in Saudi Arabia. The key outcomes of the study suggest that (i) NEDs' independence represents a typical practice in CG and; (ii) NEDs' competencies and roles represent a governance issue which needs to be addressed via CG code to protect the stakeholder groups. The findings imply a shift in the recent focus on developing and reforming CG Codes towards CSR orientation and the growing role of NEDs in stakeholder's protection. The key contribution of the study can be found in the enhancement of the current level of understanding of non-executive directors' competencies and role and the improvement of CG codes to address the issue of stakeholder engagement. The multiple-theoretical framework including aspects of resources dependence, stakeholder and resource-based view of the firm theories allows for the interpretation of the link between NEDs competencies and roles in the CSR context. Board members and managers can find this study useful in improving the election criteria of NEDs' appointing mechanisms. Additional implications relate to policy makers as the need for increasing the regulatory capacity and legal systems in the area of CG reform is highlighted. Stakeholder's pressures and forced and normative variety in particular have the potential to enhance the level of CSR adoption.

show abstract

Section: The Need Of Non-executives Director (Ned)mentioning

confidence: 83%

Section: The Need Of Non-executives Director (Ned)mentioning

confidence: 99%

Section: The Need Of Non-executives Director (Ned)mentioning

confidence: 99%

Section: The Need Of Non-executives Director (Ned)mentioning

confidence: 99%

Section: The Need Of Non-executives Director (Ned)mentioning

confidence: 99%

See 3 more Smart Citations

Adoption of Corporate Social Responsibility: Board Competencies and Roles

Alshareef¹,

Sandhu²

2015

IJBM

View full text Add to dashboard Cite

show abstract

ESG disclosure and financial performance of multinational enterprises: The moderating effect of board standing committees

2023

View full text Add to dashboard Cite

The study examines the impact of board committee indexes on the relationship between Environmental, Social, and Governance (ESG) disclosure, and accounting‐ and market‐based performance measures of multinational enterprises (MNEs). Using quantile regression analysis and a large balanced panel data of 500 multinational companies operating in 40 countries from 2009 to 2019 (i.e., 5500 firm‐year observations), we uncovered the following significant associations: (i) a positive relationship between ESG disclosure and accounting performance indicators for large‐sized MNEs, but this relationship is counteracted by the negative influence of the audit and sustainability committee indexes; (ii) the association between market‐based performance outcomes and ESG disclosure is positively affected by the compensation, nomination, and sustainability committee indexes, while it is negatively influenced by the audit committee index; (iii) the combined board committee index has varying impacts on the connection between the components of ESG disclosure, and accounting and market‐relevant performance metrics for different sizes of MNEs; and (iv) while the audit and sustainability committee indexes exert negative effects on the relationship between the components of ESG disclosure and performance measures, these effects are countered by the positive moderating impacts of the compensation and nomination committee indexes. The study concludes by discussing the policy implications of these results.

show abstract

Explanatory Factors of the Accounting Choices for Investments Under IAS 27 of Listed European Union Entities

Ribeiro,

Gomes Dos Santos,

Albuquerque

2024

J Corp Accounting Finance

View full text Add to dashboard Cite

This study aims to analyze the explanatory factors of the accounting choices for investments of entities with securities traded on regulated markets from the European Union (EU) under International Accounting Standards (IAS) 27—Separate Financial Statements (SFS). According to IAS 27, investments in their scope can be accounted for by using the cost, equity method, or fair value, which represents alternative accounting methods commonly known in the literature as accounting choices. To identify the factors that may explain the accounting choices for investments under IAS 27, a logistic regression model is used. The research covers listed entities from 19 out of the 21 EU countries where IAS 27 is required or permitted. The findings highlight that the entities’ size and investment weight likely explain the adoption of the cost method, conversely to the size of the board of directors, which negatively explains its use. Accounting choices for investments under SFS are not yet explored in the literature. Moreover, this research also proposes further explanatory factors in the scope of the literature on accounting choices. This paper can potentially benefit a diverse set of stakeholders, namely the accounting standard‐setters, as they can draw attention to the comparability issues from the use of accounting choices, which may mitigate the financial information usefulness for decision‐making. Furthermore, auditors, supervisors, as well as investors and other users, can have a more comprehensive perspective of the reasons behind the method chosen by entities for accounting for their financial investments.

show abstract

Corporate governance and the role of non‐executive directors in large UK companies: an empirical study

Cited by 78 publications

References 4 publications

Adoption of Corporate Social Responsibility: Board Competencies and Roles

Adoption of Corporate Social Responsibility: Board Competencies and Roles

ESG disclosure and financial performance of multinational enterprises: The moderating effect of board standing committees

Explanatory Factors of the Accounting Choices for Investments Under IAS 27 of Listed European Union Entities

Contact Info

Product

Resources

About