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The Return on Human Capital: the Case of UK Non-executive Directors that are also Executive Directors

Author

Listed:
  • Charlie Weir

    (Aberdeen Business School)

  • Oleksandr Talavera

    (School of Economics, University of East Anglia)

  • Alexander Muravyev

    (Institute for the Study of Labor (IZA))

Abstract

This paper studies the relationship between directors' human capital and the company's performance. In particular, we focus on the effect of non-executive directors who are also executive in other firms (independent executives, IE). The analysis is based on a unique dataset of publicly traded firms in the UK which we obtain by matching Extel Financial and Corporate Register data. Our results suggest a positive relationship between the presence of IE on corporate board and company performance. The effect is stronger IEs come from well performing firms. Additionally, the similarity of industries plays a role.

Suggested Citation

  • Charlie Weir & Oleksandr Talavera & Alexander Muravyev, 2011. "The Return on Human Capital: the Case of UK Non-executive Directors that are also Executive Directors," University of East Anglia Applied and Financial Economics Working Paper Series 029, School of Economics, University of East Anglia, Norwich, UK..
    • Handle: RePEc:uea:aepppr:2011_29
    as

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    File URL: https://ueaeco.github.io/working-papers/papers/afe/UEA-AFE-029.pdf
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    References listed on IDEAS

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    More about this item

    Keywords

    human capital; corporate board; non-executive directors;
    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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