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Minggu, 01 April 2012

The Nomination and Motivations of Irish Non- Executive Directors of Listed Companies

by : Anna Egan, Rebecca Maughan & Joseph Coughlan

Published : Conference papers School of Accounting and Finance, 2009-05-01

This paper reports the preliminary findings of an empirical investigation into the process
of appointing non-executive directors and their motivations behind the adoption of the
position. While research into the board of directors has been extensive, little deliberation
has been given to the motives of non-executives who choose to sit on boards (Roberts,
2002). Given that the board of directors has been charged with much more responsibility
in recent years and is being held to a higher level of accountability than would
historically be expected (Donnelly and Kelly, 2005), the choice of non-executives to
continue to take up roles on boards is an interesting one and as such warrants academic
attention. Many of the directors interviewed acknowledged that the remuneration
received for the position did not fully compensate for the personal liability they exposed
themselves to and as such was not an appropriate determinant of motive. Instead nonexecutive
directors interviewed presented motivations such as the valid contribution they
had to offer, or merely viewed the acceptance of non-executive positions as part of the
The validity of nomination and selection procedures demonstrated by Irish companies in
sourcing non-executive directors has been highlighted as a consistent source of concern
(O'Higgins, 2002, Brennan and McDermott, 2004, O'Regan et al., 2005). By focusing on
the nomination of non-executive directors it is hoped that some insight will be gained as
to the level of commitment organizations have made to implementing good corporate
For the purpose of the study qualitative research in the form of semi-structured interviews
with non-executive directors was carried out. This research method has been chosen as
semi-structured interviews offer a focused approach to questioning, while allowing for
greater probing and interaction with the interviewee than other methods provide. The
non-executive directors interviewed demonstrated a lack of consistent viewpoint
regarding the nominations process of organizations. Whereas some non-executive
directors interviewed suggest the nominations procedure is a robust process, others would
view it as the job of the chairman and have little or no knowledge of any actual procedure
in place.


Stemming from the financial scandals of the 1990s and the resulting corporate
governance initiatives established (Lannoo, 1999), the board of directors has faced
increased scrutiny. In particular non-executive directors of plc boards have been met with
a substantial rise in responsibilities both from legal and other standpoints. Although the
Cadbury Report (1992) and it’s successors attempted to address many areas that were
viewed as contributing to poor corporate governance, the board of directors was given by
far the most weight.
While . . . . .... (baca_selengkapnya )

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