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

Charlie Weir, Oleksandr Talavera () and Alexander Muravyev ()
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Charlie Weir: Aberdeen Business School
Alexander Muravyev: Institute for the Study of Labor (IZA)
Authors registered in the RePEc Author Service: Александр Муравьев

No 29, University of East Anglia Applied and Financial Economics Working Paper Series from School of Economics, University of East Anglia, Norwich, UK.

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.

Keywords: human capital; corporate board; non-executive directors (search for similar items in EconPapers)
JEL-codes: G34 G39 (search for similar items in EconPapers)
Date: 2011-07-19
New Economics Papers: this item is included in nep-bec and nep-hrm
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