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An Analysis of Changes in Board Structure during Corporate Governance Reforms
Author(s) -
Hillier David,
McColgan Patrick
Publication year - 2006
Publication title -
european financial management
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.311
H-Index - 64
eISSN - 1468-036X
pISSN - 1354-7798
DOI - 10.1111/j.1468-036x.2006.00332.x
Subject(s) - corporate governance , accounting , business , independence (probability theory) , equity (law) , control (management) , economics , management , finance , political science , statistics , mathematics , law
This study examines the evolution of company board structure during a period of corporate governance reform. Using data over a time period following the publication of the Cadbury Report (1992) we present evidence of an increase in the independence of UK boards, as measured by an increased willingness to employ independent non‐executive directors, and to separate the positions of the CEO and the Chairman of the Board. In examining the determinants of these changes, we find that boards change more readily in response to changes in managerial control, equity issuance and corporate performance than changes in the firm‐specific operating environment of companies.