Performance Effects of Appointing Other Firms' Executive Directors to Corporate Boards: An Analysis of UK Firms

Alexander Muravyev (), Oleksandr Talavera () and Charlie Weir ()
Additional contact information
Alexander Muravyev: Higher School of Economics, St. Petersburg Branch
Charlie Weir: Robert Gordon University
Authors registered in the RePEc Author Service: Александр Муравьев

No 7962, IZA Discussion Papers from Institute of Labor Economics (IZA)

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 relationship 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.

Keywords: executive directors; non-executive directors; company performance (search for similar items in EconPapers)
JEL-codes: G34 G39 (search for similar items in EconPapers)
Pages: 38 pages
Date: 2014-02
New Economics Papers: this item is included in nep-acc, nep-bec, nep-eff, nep-eur and nep-hrm
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Forthcoming - published in: Review of Quantitative Finance and Accounting, 2016, 46(1), 25-45

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Journal Article: Performance effects of appointing other firms’ executive directors to corporate boards: an analysis of UK firms (2016)
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