Performance effects of appointing other firms' executive directors to corporate boards: an analysis of UK firms.

Muravyev, Alexander; Talavera, Oleksandr; Weir, Charlie

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.

Citation

MURAVYEV, A., TALAVERA, O. and WEIR, C. 2016. Performance effects of appointing other firms' executive directors to corporate boards: an analysis of UK firms. Review of quantitative finance and accounting [online], 46(1), pages 25-45. Available from: https://doi.org/10.1007/s11156-014-0460-6

• Journal Article Type: Article
• Acceptance Date: May 10, 2014
• Online Publication Date: May 10, 2014
• Publication Date: Jan 30, 2016
• Deposit Date: Sep 15, 2016
• Publicly Available Date: Sep 15, 2016
• Journal: Review of Quantitative Finance and Accounting
• Print ISSN: 0924-865X
• Electronic ISSN: 1573-7179
• Publisher: Springer
• Peer Reviewed: Peer Reviewed
• Volume: 46
• Issue: 1
• Pages: 25-45
• DOI: https://doi.org/10.1007/s11156-014-0460-6
• Keywords: Executive directors; Nonexecutive directors; Company performance
• Public URL: http://hdl.handle.net/10059/1687