A study of the incidence and independence of nomination committees
Document Type
Journal article
Source Publication
Internation Journal of Corporate Governance
Publication Date
1-1-2012
Volume
3
Issue
1
First Page
84
Last Page
104
Publisher
Inderscience Enterprises Ltd.
Keywords
boards of directors; nomination committee; demographics and composition; agency theory; corporate governance
Abstract
The purpose of this study is to understand the factors influencing the adoption and independence of nomination committees. Previous literature identifies potential substitutability and complementarity between corporate governance arrangements that may be beneficial from the perspective of outsiders (e.g., Rediker and Seth, 1995), but our work suggests that similar complementarities may be identified from the perspective of firm insiders. Probit analysis of data from the annual reports of UK public companies from 1998 through 2002 reveals that the shareholdings of substantial shareholders are positively related to the selection of non-executive members to the nomination committee, but that these shareholdings are negatively related to the use of nomination committees in the first place. Coupled with the participation of over 40% of UK CEOs on the appointment committees of their own firms, these results suggest that some appointment committees are used to limit the influence of substantial shareholders on future board appointments.
DOI
10.1504/IJCG.2012.045283
Print ISSN
17543037
E-ISSN
17543045
Publisher Statement
Copyright © 2006 John Wiley & Sons, Ltd.
Access to external full text or publisher's version may require subscription.
Full-text Version
Publisher’s Version
Language
English
Recommended Citation
Cheng, S., & Rayton, B. A. (2012). A study of the incidence and independence of nomination committees. International Journal of Corporate Governance, 3(1), 84-104. doi: 10.1504/IJCG.2012.045283
