This thesis explores board nationality diversity, focusing on foreign non-executive
directors and their relationship with CEO compensation, firm performance, and crash
risk for a sample of UK firms from 2002 to 2015. First, we examine the changes in
board composition over the years and find an increase in foreign non-executive
directors and in the number of foreign CEOs managing UK firms. We discover boards
have become smaller, more independent and CEOs occupying dual roles have
considerably reduced. Next, we analyse the relationship between foreign non executive directors and CEO compensation and note that firms with more foreign non executive directors pay less to their CEO. Moreover, European and other international
non-executive directors are particularly effective at limiting CEO compensation. Then
we examine the impact of foreign non-executive directors on firm performance and
show that foreign non-executive directors positively impact firm value. CEO and
executive directors’ equity-like compensation and share ownership also positively
influences firm performance. Our findings suggest that European and American non executive directors are more effective in improving corporate performance. Finally, we
analyse the relationship between foreign non-executive directors, CEO compensation
and crash risk. Foreign non-executive directors monitor the board and mitigate the
impact of CEO equity-linked pay on stock price crash risk. Our analysis reveals that
leverage increases crash risk, but that foreign non-executive directors, of high
leverage firms lower crash risk. Overall, foreign non-executive directors serve as
effective monitors and advisors to moderate executive pay, improve firm performance
and reduce stock price crash risk.
| Identifer | oai:union.ndltd.org:BRADFORD/oai:bradscholars.brad.ac.uk:10454/19681 |
| Date | January 2021 |
| Creators | Javid, Sammiah |
| Contributors | Pinto, Helena, Ozkan, Aydin |
| Publisher | University of Bradford, Faculty of Management, Law and Social Sciences |
| Source Sets | Bradford Scholars |
| Language | English |
| Detected Language | English |
| Type | Thesis, doctoral, PhD |
| Rights | <a rel="license" href="http://creativecommons.org/licenses/by-nc-nd/3.0/"><img alt="Creative Commons License" style="border-width:0" src="http://i.creativecommons.org/l/by-nc-nd/3.0/88x31.png" /></a><br />The University of Bradford theses are licenced under a <a rel="license" href="http://creativecommons.org/licenses/by-nc-nd/3.0/">Creative Commons Licence</a>. |
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