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

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  • Alexander Muravyev

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  • Oleksandr Talavera

    ()

  • Charlie Weir

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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. Copyright Springer Science+Business Media New York 2016

Suggested Citation

  • Alexander Muravyev & Oleksandr Talavera & Charlie Weir, 2016. "Performance effects of appointing other firms’ executive directors to corporate boards: an analysis of UK firms," Review of Quantitative Finance and Accounting, Springer, vol. 46(1), pages 25-45, January.
  • Handle: RePEc:kap:rqfnac:v:46:y:2016:i:1:p:25-45
    DOI: 10.1007/s11156-014-0460-6
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    Cited by:

    1. Muravyev, Alexander, 2017. "Boards of directors in Russian publicly traded companies in 1998–2014: Structure, dynamics and performance effects," Economic Systems, Elsevier, vol. 41(1), pages 5-25.
    2. D. G. DeBoskey & Yan Luo & Linying Zhou, 2019. "CEO power, board oversight, and earnings announcement tone," Review of Quantitative Finance and Accounting, Springer, vol. 52(2), pages 657-680, February.

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    More about this item

    Keywords

    Executive directors; Non-executive directors; Company performance; G34; G39;
    All these keywords.

    JEL classification:

    • G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance
    • G39 - Financial Economics - - Corporate Finance and Governance - - - Other

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