Analysis of the effect of the change in board composition of the companies listed in London Stock Exchange FTSE 100 Index on the effectiveness of the boards’ risk management decision as measured by market-based beta between 2007 and 2010
Tarasov, Nikolay (2010)
Tarasov, Nikolay
Metropolia Ammattikorkeakoulu
2010
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Julkaisun pysyvä osoite on
https://urn.fi/URN:NBN:fi:amk-2011121418477
https://urn.fi/URN:NBN:fi:amk-2011121418477
Tiivistelmä
In this research the author examines the relationship between the change in board composition of the companies included in the FTSE 100 index of London Stock Exchange and its impact on the effectiveness of the boards’ decisions regarding risk management reflected by the change in market-based beta.
The results of this study have identified no significant correlation between change in board composition for the companies in the index overall, but has found the presence of a significant negative relationship between the variables in the companies, whose boards’ composition has changed in a way that the proportion of non-executive directors decreased between. The author discusses the implications of these findings in the context of existing research of the relationship between board composition and board decisions.
The study analysed the relationship between 2007 and 2010, assuming that the recent financial crisis has increased investors’ attention to the way the companies are governed and subsequently in an increased activity of non-executive directors.
The results of this study have identified no significant correlation between change in board composition for the companies in the index overall, but has found the presence of a significant negative relationship between the variables in the companies, whose boards’ composition has changed in a way that the proportion of non-executive directors decreased between. The author discusses the implications of these findings in the context of existing research of the relationship between board composition and board decisions.
The study analysed the relationship between 2007 and 2010, assuming that the recent financial crisis has increased investors’ attention to the way the companies are governed and subsequently in an increased activity of non-executive directors.