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Evaluating the Characteristics of Corporate Boards Associated with Layoff Decisions

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  • Alfred Yawson

Abstract

The paper evaluates the characteristics of corporate boards associated with layoff decisions using a large sample of UK firms suffering performance declines over the period 1994–2003. The results show that firms are less likely to respond to performance declines with employee layoffs when they have large boards. Further analysis shows that layoff decisions are positively associated with the proportion of outside directors and directors’ remuneration. The findings provide some support to the recommendations of the Cadbury Report (1992) and Higgs Review (2003) on the importance of the structure and composition of board of directors in the corporate governance process.

Suggested Citation

  • Alfred Yawson, 2006. "Evaluating the Characteristics of Corporate Boards Associated with Layoff Decisions," Corporate Governance: An International Review, Wiley Blackwell, vol. 14(2), pages 75-84, March.
    • Handle: RePEc:bla:corgov:v:14:y:2006:i:2:p:75-84
    DOI: 10.1111/j.1467-8683.2006.00488.x
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    Cited by:

    1. Azimjon Kuvandikov & Andrew Pendleton & David Higgins, 2014. "Employment Change after Takeovers: The Role of Executive Ownership," British Journal of Industrial Relations, London School of Economics, vol. 52(2), pages 191-236, June.
    2. Bello Lawal, 2016. "Still on board configuration: SEC recommendations and the efficiency of adhering firms in Nigeria," Journal of Economic and Financial Studies (JEFS), LAR Center Press, vol. 4(2), pages 1-23, April.
    3. Yawson, Alfred, 2009. "Interaction effects of restructuring decisions on operating profit following performance shocks," Journal of Economics and Business, Elsevier, vol. 61(3), pages 216-237.
    4. Syed Zulfiqar Ali Shah, 2007. "Discussion of Employee Layoffs, Shareholder Wealth and Firm Performance: Evidence from the UK," Journal of Business Finance & Accounting, Wiley Blackwell, vol. 34(3‐4), pages 495-504, April.
    5. Krishna Reddy & Stuart Locke & Frank Scrimgeour, 2010. "The efficacy of principle‐based corporate governance practices and firm financial performance," International Journal of Managerial Finance, Emerald Group Publishing Limited, vol. 6(3), pages 190-219, June.
    6. Pugliese, A. & Bezemer, P.J. & Zattoni, A. & Huse, M. & van den Bosch, F.A.J. & Volberda, H.W., 2009. "Boards of Directors’ Contribution to Strategy: A Literature Review and Research Agenda," ERIM Report Series Research in Management ERS-2009-013-STR, Erasmus Research Institute of Management (ERIM), ERIM is the joint research institute of the Rotterdam School of Management, Erasmus University and the Erasmus School of Economics (ESE) at Erasmus University Rotterdam.
    7. Malikov, Kamran & Demirbag, Mehmet & Kuvandikov, Azimjon & Manson, Stuart, 2021. "Workforce reductions and post-merger operating performance: The role of corporate governance," Journal of Business Research, Elsevier, vol. 122(C), pages 109-120.
    8. Naeem Tabassum & Satwinder Singh, 2020. "Corporate Governance and Organisational Performance," Springer Books, Springer, number 978-3-030-48527-6, January.
    9. Ionela Andreicovici & Nava Cohen & Silvia Ferramosca & Alessandro Ghio, 2021. "Two Wrongs Make a ‘Right’? Exploring the Ethical Calculus of Earnings Management Before Large Labor Dismissals," Journal of Business Ethics, Springer, vol. 172(2), pages 379-405, August.

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