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An investigation into the role, effectiveness and future of non-executive directors

Dixon, R.; Milton, K.; Woodhead, A.D.

Authors

R. Dixon

K. Milton

A.D. Woodhead



Abstract

This article focuses on the role, effectiveness and future of non-executive directors in Great Britain and the U.S. The relationship between executive and non-executive directors (NEDs) initially came into focus in Britain in the late 1980s with the failure of businesses such as Maxwell Communications Corp. and Polly Peck International PLC. More recently, the U.S. has seen a number of high profile corporate failures such as Enron and WorldCom. The response to these corporate failures in both the U.S. and Britain has been the introduction of codes of practice. The initial British code, published by Cadbury in 1992, pressed for the appointment of NEDs. Whilst stressing that the board's primary function was to drive the business forward, it also accorded a monitoring role to NEDs. In the late 1980s, concerns were expressed over creative accounting and confidence in external auditors fell. A further concern was that director remuneration did not appear to be determined by corporate performance. Successive governance codes since 1992 have attempted to address these issues.

Citation

Dixon, R., Milton, K., & Woodhead, A. (2005). An investigation into the role, effectiveness and future of non-executive directors. Journal of General Management, 31(1), 1-21

Journal Article Type Article
Publication Date 2005-09
Deposit Date Mar 19, 2007
Journal Journal of General Management
Print ISSN 0306-3070
Publisher SAGE Publications
Peer Reviewed Not Peer Reviewed
Volume 31
Issue 1
Pages 1-21
Keywords Business communication, Failure, Governance, Audit.
Public URL https://durham-repository.worktribe.com/output/1561238
Publisher URL http://www.braybrooke.co.uk/jogm/index.htm