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Alternative Perspectives on Independence of Directors

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  • Niamh Brennan
  • Michael McDermott

Abstract

This paper examines the issue of independence of boards of directors and non-executive directors of companies listed on the Irish Stock Exchange. Based on information published in annual reports, the study found that most Irish listed companies were complying with the Combined Code’s recommendations for a balanced board structure, albeit with only 60 per cent having majority-independent boards. The study found a lack of consistency in interpreting the definition of “independence”, a lack of disclosure of information and, by applying criteria generally regarded as prerequisite to independence of non-executive directors, certain situations which imposed upon their independence.

Suggested Citation

  • Niamh Brennan & Michael McDermott, 2004. "Alternative Perspectives on Independence of Directors," Open Access publications 10197/3786, Research Repository, University College Dublin.
    • Handle: RePEc:rru:oapubs:10197/3786
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    File URL: http://hdl.handle.net/10197/3786
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    References listed on IDEAS

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    1. Leo Mac Canna & Niamh Brennan & Eleanor O'Higgins, 1998. "National Networks of Corporate Power: An Irish Perspective," Journal of Management & Governance, Springer;Accademia Italiana di Economia Aziendale (AIDEA), vol. 2(4), pages 357-379, December.
    2. ., 1998. "Value in Use and Value in Exchange," Chapters, in: Heinz D. Kurz & Neri Salvadori (ed.), The Elgar Companion to Classical Economics, volume 0, chapter 127, Edward Elgar Publishing.
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    5. Yermack, David, 1996. "Higher market valuation of companies with a small board of directors," Journal of Financial Economics, Elsevier, vol. 40(2), pages 185-211, February.
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    8. Richard Bostock, 1995. "Company Responses to Cadbury," Corporate Governance: An International Review, Wiley Blackwell, vol. 3(2), pages 72-77, April.
    9. John A. Pearce, 1983. "The relationship of internal versus external orientations to financial measures of strategic performance," Strategic Management Journal, Wiley Blackwell, vol. 4(4), pages 297-306, October.
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    Cited by:

    1. Hsien-Chang Kuo & Lie-Huey Wang & Hui-Wen Liu, 2012. "Corporate Governance and Capital Structure:Evidence from Taiwan SMEs," Review of Economics & Finance, Better Advances Press, Canada, vol. 2, pages 43-58, August.
    2. Diógenes Lagos Cortés & Rolando Roncando Rachid, 2021. "Independencia de la junta directiva y desempeno financiero: evidencia de empresas colombianas," Revista Finanzas y Politica Economica, Universidad Católica de Colombia, vol. 13(1), pages 171-196, March.
    3. Corinne Cortese, 2009. "A Profile of the Non-Executive Directors of Australia's Largest Companies," Australian Accounting Review, CPA Australia, vol. 19(1), pages 33-41, March.
    4. Chien Mu Yeh, 2020. "The influence of foreign institutional investors, institutional directors, and the share pledge ratio of directors on financial performance of tourism firms," Tourism Economics, , vol. 26(1), pages 179-201, February.
    5. Majid Jamal Khan & Faiza Saleem & Shahab Ud Din & Muhammad Yar Khan, 2024. "Nexus between boardroom independence and firm financial performance: evidence from South Asian emerging market," Palgrave Communications, Palgrave Macmillan, vol. 11(1), pages 1-10, December.
    6. Niamh Brennan, 2010. "A review of corporate governance research : an Irish perspective," Open Access publications 10197/2962, Research Repository, University College Dublin.
    7. Dowling, Michael & Aribi, Zakaria Ali, 2013. "Female directors and UK company acquisitiveness," International Review of Financial Analysis, Elsevier, vol. 29(C), pages 79-86.
    8. Eugenio Zubeltzu‐Jaka & Igor Álvarez‐Etxeberria & Eduardo Ortas, 2020. "The effect of the size of the board of directors on corporate social performance: A meta‐analytic approach," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 27(3), pages 1361-1374, May.
    9. Kokoreva, Maria (Кокорева, Мария) & Ulugova, Aziza (Улугова, Азиза), 2015. "Corporate governance and finance company policy: a review of research [Корпоративное Управление И Политика Финансирования Компаний: Обзор Исследований]," Ekonomicheskaya Politika / Economic Policy, Russian Presidential Academy of National Economy and Public Administration, vol. 6, pages 160-170.
    10. Brennan Niamh M., 2022. "Is a Board of Directors a Team?," The Irish Journal of Management, Sciendo, vol. 41(1), pages 5-19, July.
    11. Jyoti Mahadeo & Teerooven Soobaroyen & Vanisha Hanuman, 2012. "Board Composition and Financial Performance: Uncovering the Effects of Diversity in an Emerging Economy," Journal of Business Ethics, Springer, vol. 105(3), pages 375-388, February.
    12. Puan Yatim, 2010. "Board structures and the establishment of a risk management committee by Malaysian listed firms," Journal of Management & Governance, Springer;Accademia Italiana di Economia Aziendale (AIDEA), vol. 14(1), pages 17-36, February.
    13. Afzalur Rashid, 2015. "Revisiting Agency Theory: Evidence of Board Independence and Agency Cost from Bangladesh," Journal of Business Ethics, Springer, vol. 130(1), pages 181-198, August.
    14. Donnelly, Ray, 2008. "Accounting, board independence and contagion effects from adverse press comment: The case of Elan," The British Accounting Review, Elsevier, vol. 40(3), pages 245-259.

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