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Derivatives and the Non-executive Director

Author

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  • Buckley, Adrian
  • van der Nat, Mattheus

Abstract

Do non-executive directors have the wherewithal to overview a corporation's integrity, quality of performance and management in the area of derivatives policy? In a survey of the understanding and monitoring of derivatives in a small sample of quoted companies, we found disturbing levels of ignorance among independent directors. Whilst three quarters of non-executive directors surveyed favoured the use of derivatives in appropriate circumstances, namely hedging, over two-thirds confessed to an inadequate knowledge on the topic of derivatives. Also, we found a series of naïve and dangerous views expressed by many participants in our survey of derivatives and the non-executive director.

Suggested Citation

  • Buckley, Adrian & van der Nat, Mattheus, 2003. "Derivatives and the Non-executive Director," European Management Journal, Elsevier, vol. 21(3), pages 389-397, June.
    • Handle: RePEc:eee:eurman:v:21:y:2003:i:3:p:389-397
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    Citations

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    Cited by:

    1. Dionne, Georges & Triki, Thouraya, 2005. "Risk management and corporate governance: The importance of independence and financial knowledge for the board and the audit committee," Working Papers 05-3, HEC Montreal, Canada Research Chair in Risk Management.
    2. Anna Rose & Jacob Rose, 2008. "Management Attempts to Avoid Accounting Disclosure Oversight: The Effects of Trust and Knowledge on Corporate Directors’ Governance Ability," Journal of Business Ethics, Springer, vol. 83(2), pages 193-205, December.
    3. Manal Ahdadou & Abdellah Aajly & Mohamed Tahrouch, 2024. "Unlocking the potential of augmented intelligence: a discussion on its role in boardroom decision-making," International Journal of Disclosure and Governance, Palgrave Macmillan, vol. 21(3), pages 433-446, September.
    4. Georges Dionne & Thouraya Triki, 2013. "On risk management determinants: what really matters?," The European Journal of Finance, Taylor & Francis Journals, vol. 19(2), pages 145-164, February.

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