12/29/2015

WhydoCEOsholdnonexecutivedirectorships?Ananalysisoftheroleofgovernanceandownership:ManagementDecision:Vol47,No5

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WhydoCEOsholdnonexecutivedirectorships?Ananalysisoftheroleofgovernanceandownership
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WhydoCEOsholdnonexecutivedirectorships?Ananalysisofthe
roleofgovernanceandownership
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References(34) Citedby(Crossref,4) Citedby(Scopus,2)

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Author(s):

NoelO'Sullivan(SheffieldUniversityManagementSchool,Sheffield,UK)

Citation:

NoelO'Sullivan,(2009)"WhydoCEOsholdnonexecutivedirectorships?Ananalysisoftheroleof
governanceandownership",ManagementDecision,Vol.47Iss:5,pp.760777

DOI

http://dx.doi.org/10.1108/00251740910960105

http://www.emeraldinsight.com/doi/full/10.1108/00251740910960105

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12/29/2015

WhydoCEOsholdnonexecutivedirectorships?Ananalysisoftheroleofgovernanceandownership:ManagementDecision:Vol47,No5

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Thefulltextofthisdocumenthasbeendownloaded904timessince2009

Acknowledgements:

ThispaperhasbenefitedfromthecommentsofRayDonnelly,participantsatthe2005Conferenceofthe
BritishAcademyofManagementinOxfordandtheanonymousreviewersofthisjournal.Theresearch
assistanceofKerryMussonisalsogratefullyacknowledged.

Abstract:

Purpose
Thispaperseekstoinvestigatetheholdingofnonexecutive directorships byCEOsinasampleof387
largeUKcompanies.Themainobjectiveofthepaperistoascertainwhethertheholdingofadditional
directorships byCEOsisinfluencedbythegovernanceandownershipcharacteristicsoftheircompanies.
Design/methodology/approach
Theapproachtakestheformofanempiricalanalysisoftheholdingofnonexecutive directorships by387
CEOsoflargeUKcompanies.
Findings
Thestudyfindsthat101CEOs(26percent)holdatleastonenonexecutive directorship butthemostany
singleCEOholdsisthreewiththevastmajorityholdingoneother directorship .CEOswhoalsoserveas
chairmanaremorelikelytoholdnonexecutive directorships whileCEOsincompanieswithgreater
concentrationofexternalownershiparelesslikelytoholdother directorships .Thestudyfindsnoevidence
thateithernonexecutiverepresentationormanagerialownership(includingCEOownership)influencesthe
holdingofadditional directorships .Theholdingofadditional directorships ispositivelyrelatedtocompany
size,suggestingthatthemorecomplexenvironmentinwhichCEOsoflargecompaniesoperateleadstothe
offerofadditional directorships .
Originality/value
Thefindingsareimportantastheykeyintoanongoingdebateonwhethertheholdingofadditional
directorships byCEOsisconsistentwithgoodgovernancepractice.Theevidencepresentedhereprovides
mixedinformationforgovernanceregulators.WhileasignificantmajorityofCEOsdonotholdadditional
directorships ,thereisevidencethatweakerboardandexternalownershipmonitoringisassociatedwitha
greaterlikelihoodthatCEOswillsitonotherboards.

Keywords:

Corporategovernance,Boards,Chiefexecutives, Directors

Type:

Researchpaper

Publisher:

EmeraldGroupPublishingLimited

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http://www.emeraldinsight.com/doi/full/10.1108/00251740910960105

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