The Return on Human Capital: the Case of UK Non-executive Directors that are also Executive Directors
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.
|Date of creation:||19 Jul 2011|
|Date of revision:|
|Contact details of provider:|| Postal: |
Phone: 44 1603 591131
Fax: +44(0)1603 4562592
Web page: http://www.uea.ac.uk/eco/
More information through EDIRC
|Order Information:|| Postal: Helen Chapman, School of Economics, University of East Anglia, Norwich Research Park, Norwich, NR4 7TJ, UK|
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Michael C. Jensen, 1994.
"The Modern Industrial Revolution, Exit, And The Failure Of Internal Control Systems,"
Journal of Applied Corporate Finance,
Morgan Stanley, vol. 6(4), pages 4-23.
- Michael C. Jensen, 2010. "The Modern Industrial Revolution, Exit, and the Failure of Internal Control Systems," Journal of Applied Corporate Finance, Morgan Stanley, vol. 22(1), pages 43-58.
- Jensen, Michael C, 1993. " The Modern Industrial Revolution, Exit, and the Failure of Internal Control Systems," Journal of Finance, American Finance Association, vol. 48(3), pages 831-80, July.
- Renée B. Adams & Daniel Ferreira, 2007. "A Theory of Friendly Boards," Journal of Finance, American Finance Association, vol. 62(1), pages 217-250, 02.
- Joseph G. Altonji & Nicolas Williams, 2005.
"Do wages rise with job seniority? A reassessment,"
Industrial and Labor Relations Review,
ILR Review, Cornell University, ILR School, vol. 58(3), pages 370-397, April.
- Weisbach, Michael S., 1988. "Outside directors and CEO turnover," Journal of Financial Economics, Elsevier, vol. 20(1-2), pages 431-460, January.
- David Hillier & Patrick McColgan, 2006. "An Analysis of Changes in Board Structure during Corporate Governance Reforms," European Financial Management, European Financial Management Association, vol. 12(4), pages 575-607.
- Coles, Jeffrey L. & Daniel, Naveen D. & Naveen, Lalitha, 2008. "Boards: Does one size fit all," Journal of Financial Economics, Elsevier, vol. 87(2), pages 329-356, February.
- McKnight, Phillip J. & Weir, Charlie, 2009. "Agency costs, corporate governance mechanisms and ownership structure in large UK publicly quoted companies: A panel data analysis," The Quarterly Review of Economics and Finance, Elsevier, vol. 49(2), pages 139-158, May.
- Steven Young, 2000. "The Increasing Use of Non-Executive Directors: Its Impact on UK Board Structure and Governance Arrangements," Journal of Business Finance & Accounting, Wiley Blackwell, vol. 27(9&10), pages 1311-1342.
- Milton Harris & Artur Raviv, 2008. "A Theory of Board Control and Size," Review of Financial Studies, Society for Financial Studies, vol. 21(4), pages 1797-1832, July.
- Kaplan, Steven N. & Reishus, David, 1990. "Outside directorships and corporate performance," Journal of Financial Economics, Elsevier, vol. 27(2), pages 389-410, October.
- Alexandros Zangelidis, 2008. "Occupational And Industry Specificity Of Human Capital In The British Labour Market," Scottish Journal of Political Economy, Scottish Economic Society, vol. 55(4), pages 420-443, 09.
- Fama, Eugene F, 1980. "Agency Problems and the Theory of the Firm," Journal of Political Economy, University of Chicago Press, vol. 88(2), pages 288-307, April.
When requesting a correction, please mention this item's handle: RePEc:uea:aepppr:2011_29. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Alasdair Brown)
If references are entirely missing, you can add them using this form.