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Derivatives and the Non-executive Director


  • Buckley, Adrian
  • van der Nat, Mattheus


Do non-executive directors have the wherewithal to overview a corporation's integrity, quality of performance and management in the area of derivatives policy? In a survey of the understanding and monitoring of derivatives in a small sample of quoted companies, we found disturbing levels of ignorance among independent directors. Whilst three quarters of non-executive directors surveyed favoured the use of derivatives in appropriate circumstances, namely hedging, over two-thirds confessed to an inadequate knowledge on the topic of derivatives. Also, we found a series of naïve and dangerous views expressed by many participants in our survey of derivatives and the non-executive director.

Suggested Citation

  • Buckley, Adrian & van der Nat, Mattheus, 2003. "Derivatives and the Non-executive Director," European Management Journal, Elsevier, vol. 21(3), pages 389-397, June.
  • Handle: RePEc:eee:eurman:v:21:y:2003:i:3:p:389-397

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    References listed on IDEAS

    1. Eric von Hippel, 1994. ""Sticky Information" and the Locus of Problem Solving: Implications for Innovation," Management Science, INFORMS, vol. 40(4), pages 429-439, April.
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    Cited by:

    1. Georges Dionne & Thouraya Triki, 2005. "Risk Management and Corporate Governance: the Importance of Independence and Financial Knowledge for the Board and the Audit Committee," Cahiers de recherche 0515, CIRPEE.
    2. Anna Rose & Jacob Rose, 2008. "Management Attempts to Avoid Accounting Disclosure Oversight: The Effects of Trust and Knowledge on Corporate Directors’ Governance Ability," Journal of Business Ethics, Springer, vol. 83(2), pages 193-205, December.
    3. Georges Dionne & Thouraya Triki, 2013. "On risk management determinants: what really matters?," The European Journal of Finance, Taylor & Francis Journals, vol. 19(2), pages 145-164, February.


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