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Non-executive directors in the Netherlands: another expectations gap?

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  • Reggy Hooghiemstra
  • Jaap Manen

Abstract

Notwithstanding the importance of non-executives as a control mechanism to reduce the potential divergence between corporate management and shareholders and the increasing attention they receive from both regulators as well as the media, research concerning non-executives is still in its infancy. This dearth of knowledge may account for the unrealistic expectations the public is said to have of non-executive directors. However, no study has previously looked into possible expectations gaps regarding non-executive directors. This study fills that lacuna and reports the results of a survey sent to more than 1,000 non-executive directors, employee representatives, and institutional investors from the Netherlands. Although we do not find an expectations gap regarding nonexecutive directors' main function, gaps are found with respect to stakeholders' satisfaction with current functioning of non-executive directors and non-executives' roles concerning directors' remuneration. Furthermore, a gap is also present with respect to the interests non-executive directors should serve. The results indicate that, notwithstanding the Cadbury and Peters Committees, the public's confidence in corporate governance has not yet been fully restored.

Suggested Citation

  • Reggy Hooghiemstra & Jaap Manen, 2004. "Non-executive directors in the Netherlands: another expectations gap?," Accounting and Business Research, Taylor & Francis Journals, vol. 34(1), pages 25-41.
    • Handle: RePEc:taf:acctbr:v:34:y:2004:i:1:p:25-41
    DOI: 10.1080/00014788.2004.9729949
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    References listed on IDEAS

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    Cited by:

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    3. Mitchell Bryce & Muhammad Jahangir Ali & Paul R. Mather, 2021. "Director expectations gap and hindsight bias," Accounting and Finance, Accounting and Finance Association of Australia and New Zealand, vol. 61(2), pages 2965-2996, June.
    4. Linda Höglund & Maria Mårtensson & Aswo Safari, 2018. "Expectations and the performance of governance functions between a board, management and other stakeholders: the case of Robotdalen," Journal of Management & Governance, Springer;Accademia Italiana di Economia Aziendale (AIDEA), vol. 22(4), pages 805-827, December.

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