Determinants of the quality of external board evaluation in the UK

Sobhan, Abdus and Adegbite, Emmanuel (2021) Determinants of the quality of external board evaluation in the UK. Corporate Governance: The International Journal of Business in Society. ISSN 1472-0701 (In Press)

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Abstract

Purpose – This study examines the influence of the following on the quality of externally facilitated board evaluation: timing of adoption of external board evaluation, type of evaluators, and the independence of external facilitators.

Design/methodology/approach – The statements on board evaluation in annual reports of a sample of FTSE 350 companies were content analysed to measure the quality of externally facilitated board evaluation. We then used descriptive analysis and inferential statistics to demonstrate the possible association between the timing of adoption as well as the type and independence of external facilitators, and the quality of externally facilitated board evaluation.

Findings – Results reveal some effects of the timing of adoption as well as the type and independence of external facilitators on the quality of externally facilitated board evaluation.

Practical implications – Shareholders should be aware of the timing of adoption as well as consider the types and independence of external facilitators, given their influence on the quality of externally facilitated board evaluation. Regulatory authorities should provide more specific guidance on what types of professional organisations can be engaged as external facilitators and on the implementation of externally facilitated board evaluation, in order to promote its quality.

Originality/value – Several studies have provided theoretical accounts on how board evaluation should be conducted to ensure its effectiveness. However, there is a dearth of empirical literature, which examines the quality of externally facilitated board evaluation. This study develops a quality measure for externally facilitated board evaluation and shows the effect of the timing of adoption, types and independence of external facilitators on its quality. Our study forges ahead an institutional theorising of external board evaluation.

Item Type: Article
Uncontrolled Keywords: board evaluation, institutional theory, external facilitators, content analysis, United Kingdom
Subjects: N100 Business studies
Department: Faculties > Business and Law > Newcastle Business School > Accounting and Finance
Depositing User: John Coen
Date Deposited: 27 Apr 2021 10:05
Last Modified: 27 Apr 2021 10:15
URI: http://nrl.northumbria.ac.uk/id/eprint/46021

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