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Boards of Directors

The structure and composition of Boards of Directors can have a material impact on business performance.

Our academic research contributes to shaping the debate in a number of ways by providing rigorous analysis of hot topics such as how diversity on boards impacts performance and risk, how previous experience shapes future performance and how the number of commitments a Director takes on can impact performance. These findings are useful for those recruiting Board level Directors and for those monitoring Boards (Institutional Investors for example).

Our research on Boards

New research from Professor Ian Garrett and Dr Ning Gao demonstrates that CEOs are judged on their companies' social reputation in the labour market for Directors. Their results also suggest that social reputation plays an important role in promoting corporate social responsibility (CSR).

A study by Professors Maria Marchica and Roberto Mura finds that firms run by female CEOs have lower leverage and less volatile earnings, and are also more likely to remain in operation, when compared to firms run by male CEOs, while research from Professor Ser-Huang Poon maintains that female leadership can improve an organisation’s corporate social responsibility (ESG), especially in the areas of diversity and governance.

Researchers Ning Gao, Ian Garrett and Yan Xu discover that companies who recruit non-executive directors from a pool of CEOs with a track record of innovation, benefit through improved innovation and operating performance in the post-appointment years. They conclude that UK firms can improve their operating margins by as much as 10% if they appoint an innovative non-executive director

Non-executive directors key to business innovation >>

Analysis of UK general insurance firms by Dr Wei Jiang observes that qualified accountants and actuaries appointments at board-level are linked with superior corporate performance

In a piece for Management Today, Professor Kostas Stathopoulos argues that while busy directors can play to firms' advantage, they are on average detrimental to board monitoring quality and shareholder value.