Improve board effectiveness

The need for incentives

Research output: Contribution to journalArticle

34 Citations (Scopus)

Abstract

Roberts, McNulty and Stiles (2005) focus on the attitudes and behaviours of non-executive directors in their recommendations for improving board effectiveness. This paper addresses the importance of providing incentives for non-executives in order to improve board effectiveness. It first points out that the current norms and practices in corporate governance suggest that, without strong incentives, non-executive directors are unlikely to become engaged in corporate governance, to challenge executive decision, and to remain independent of executive influences. It then proposes that, for non-executive directors to develop the attitudes and behaviors recommended by Roberts, McNulty and Stiles, it is important to require them own a significant amount of company stocks over a long period of time. It also addresses some concerns regarding the use of stock ownership to improve the effectiveness of non-executive directors in corporate governance.

Original languageEnglish (US)
JournalBritish Journal of Management
Volume16
Issue numberSPEC. ISS.
DOIs
StatePublished - Mar 2005
Externally publishedYes

Fingerprint

Industry
Incentives
Non-executive directors
Board effectiveness
Corporate governance
Ownership
Long period

ASJC Scopus subject areas

  • Business, Management and Accounting(all)
  • Management of Technology and Innovation
  • Strategy and Management

Cite this

Improve board effectiveness : The need for incentives. / Shen, Wei.

In: British Journal of Management, Vol. 16, No. SPEC. ISS., 03.2005.

Research output: Contribution to journalArticle

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