Corporate boards and incentives: empirical evidence from the UK in 1935

Pitts, Marianne, Sadler, Graham and Conyon, Martin J. (2003). Corporate boards and incentives: empirical evidence from the UK in 1935. Corporate Ownership and Control, 1 (1), pp. 136-146.

Abstract

We investigate boardroom governance using UK historical data for 1935. We demonstrate that there is a negative relationship between risk and incentives in this year. Prior research has produced anomalous results (Prendergast, 2002). Second, we show that average (median) board ownership of ordinary shares is about 7.95% (2.88%). Heuristically this figure is less than previously reported estimates for the US also using 1935 data. Finally, we show the phenomenon of multiple board membership. UK directors in 1935 hold many directorships – sometimes exceeding 10 concurrent memberships.

Divisions: Aston Business School > Accounting
Uncontrolled Keywords: board membership,board ownership,board incentives
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Published Date: 2003
Authors: Pitts, Marianne
Sadler, Graham
Conyon, Martin J.

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