The Determinants and Effects of Board Nomination Committees*

Ruigrok, Winfried; Peck, Simon; Tacheva, Sabina; Greve, Peder; Hu, Yan

doi:10.1007/s10997-006-0001-3

Cited by 159 publications

(176 citation statements)

References 86 publications

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“…Delegating particular board functions into sub-committees enhances the quality with which boards can perform their roles (Ruigrok, Peck, Tacheva, Greve and Hu, 2006): for example, nominating directors and top managers (nomination committee), monitoring internal control and audit processes (audit committee), and providing properly incentivising, executive director pay packages (remuneration committee).…”

Section: Control Variablesmentioning

confidence: 99%

Interlocking directorships and firm performance in highly regulated sectors: the moderating impact of board diversity

2012

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1 We should like to express our gratitude to ESRC for funding this research under grant number RES: 062-23-0782 (2008-2011) and to our colleague, Tim Miller, for his skilful assistance during the data processing stage. Interlocking directorships and firm performance… 2Interlocking directorships and firm performance in the highly regulated sectors: The moderating impact of board diversity ABSTRACTInterlocking directorships are a pervasive element of the corporate landscape. Academic literature documents many examples of spreading business practices and strategic outcomes through this form of inter-organizational connectedness. Yet, the findings on the long debated relationship between interlocking ties and firm performance remain mixed. In this study, we provide an analysis of this relationship on the basis of a sample of UK-listed financial and utility companies across a ten year period. Our findings provide support to the busyness hypothesis of interlocking and indicate that when used in excess, interlocking is likely to compromise the attention of directors on the focal company board. Moreover, in reconciliation of the competing views of the resource-dependence and agency theory, we propose a contingency-based model of interlocking with board diversity as a moderator of the baseline interlocking-firm performance relationship. Our results render support to the assertion that the potential for dissemination of ideas and innovations resides in the interlocking ties. However, boards need to be receptive to that knowledge exchange for this transfer to take place and this process may be facilitated by the level of and changes in board diversity. This study contributes to research into the consequences and implications of interlocking directorships and demonstrates that the search for the moderating and mediating variables represents a step in the right direction. words

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Section: Control Variablesmentioning

confidence: 99%

Interlocking directorships and firm performance in highly regulated sectors: the moderating impact of board diversity

2012

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“…It is widely accepted that the board of directors plays a critical role in an effective corporate governance mechanism, particularly in overseeing top management (Fama & Jensen, 1983), selection of senior executives (Ruigrok, Peck, Tacheva, Greve & Hu, 2006) and the extent of voluntary disclosure of remuneration for senior executives (Liu & Taylor, 2008). In general, corporate governance plays a role in constraining managers from manipulating earnings excessively.…”

Section: Board Monitoring and Earnings Managementmentioning

confidence: 99%

Board Monitoring, Management Contracting and Earnings Management: An Evidence from ASX Listed Companies

Liu¹

2012

IJEF

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This study investigates the influence of board monitoring and management contracting on earnings management. The strengthening of corporate governance following the Enron era was designed to gain investors' confidence and ensure the truthfulness of financial information. Contracting is employed as an instrument to align the interests of agents with those of shareholders which are ultimately to maximise the value and minimise monitoring costs. By developing measures of board monitoring in accordance with the Corporate Governance Principles and Recommendations (CGPR) released by the Australian Securities Exchange (ASX) Corporate Governance Council (2009) and management contracting, this study presents evidence in an Australian context that both board monitoring and management contacting influence the extent of earnings management individually and collectively. Using a sample of 138 ASX listed companies, this study finds that discretionary accruals have shown various patterns across a range of observation periods. A higher incidence of CEO duality is significantly related to lower levels of earnings management. The independence of the boards is associated with higher levels of earnings management. The results show that managerial ownership has a positive effect on discretionary accruals. Furthermore, the impact of managerial ownership outweighs the impact of board monitoring on returned earnings, particularly on the reporting of income-increasing accruals. It is observed that the strategic shareholdings of senior management have more impact on earnings than short-term incentives. This demonstrates that long-term managerial ownership is a more effective way of aligning the interests of mangers with those of shareholders than short-term compensation such as bonus plan.

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“…In addition, higher quality management passes on the true value of the firm to investors and reduces the information asymmetry (Chemmaur & Paeglis 2005). Directors' educational backgrounds can supplement management in strategy evaluation (Ruigrok, Peck, tacheva, Greve & Hu 2006). therefore, based on the literature, this study hypothesizes that family companies also need to have qualified and educated directors to manage the family companies.…”

Section: Non-executive Director Rolesmentioning

confidence: 99%