The UK governance codes have developed over the last few decades. This thesis predominantly discusses key aspects of those recommendations in relation to evidence of board effectiveness, firm performance, and firm outcomes.
Chapter 3 discusses the effects of chairman characteristics on board effectiveness. By using a large CEO turnover dataset between 2005 and 2013, the title, independence, and age of the chairman play an important role in removing poor performing CEOs. This chapter also indicates that the impact of chairman characteristics may be dependent on board size and board independence.
Chapter 4 examines the impact of female directors on firm performance. Previous studies indicate that there are mixed results in the relationship between female directors and firm performance. There is a tendency for the presence of females on the boards to encounter tokenism problems. Moreover, this chapter reports that the relationship between female directors and firm performance may depend on a certain characteristic such as firm size.
Finally, Chapter 5 examines the effect of board diversity, particularly the diversity of non-executive directors, on firm survival. This chapter argues that by focusing only on non-executive directors and financially distressed firms, firm survival can be approached via the agency theory and the resource dependence theory. This chapter finds that the competency of non-executive directors, which is proxied by six diversity dimensions, tends to outperform the independence of non-executive directors in enhancing firm survival during the period of distress.
Overall, this thesis contributes to governance studies in several ways. Firstly, it has opened the opportunity for further quantitative examinations on the chairman’s roles. Secondly, it contributes to a fast growing body of literature on board diversity. Thirdly, this thesis, particularly Chapter 5, contributes to studies on bankruptcy by linking corporate governance and financial distress via the agency theory and the resource dependence based theory.
