The impacts of multiple large ownership structure on board independence

Adelopo, Ismail; Yinusa, Ganiyu; Rufai, Ibrahim

Abstract

Copyright © 2019 Inderscience Enterprises Ltd. The determinants of the composition of corporate boards remain inconclusive. This study investigates the impacts of multiple large ownership structure on board independence for a sample of UK listed companies. Using multiple regression analysis, and controlling for endogeneity, the study shows that the larger the difference in shareholding between the first and second largest owners, the less independent is the board. Monitoring efficiency is enhanced the higher the ratio of the shareholding of the second largest shareholder relative to the shareholding of the first largest shareholder. These findings have significant implications for board monitoring and corporate governance regulations.

• Journal Article Type: Article
• Acceptance Date: Sep 14, 2017
• Online Publication Date: Nov 19, 2018
• Publication Date: Jan 1, 2019
• Deposit Date: Sep 21, 2017
• Publicly Available Date: Nov 19, 2019
• Journal: International Journal of Accounting, Auditing and Performance Evaluation
• Print ISSN: 1740-8008
• Electronic ISSN: 1740-8016
• Publisher: Inderscience
• Peer Reviewed: Peer Reviewed
• Volume: 15
• Issue: 1
• Pages: 1-30
• DOI: https://doi.org/10.1504/IJAAPE.2019.096732
• Keywords: board independence
• Public URL: https://uwe-repository.worktribe.com/output/854495
• Publisher URL: http://dx.doi.org/10.1504/IJAAPE.2019.096732
• Additional Information: Additional Information : This is the author's accepted manuscript. The final published version is available here: http://dx.doi.org/10.1504/IJAAPE.2019.096732.
• Contract Date: Sep 21, 2017