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|Title: ||Remuneration committee and corporate failure|
|Authors: ||Appiah, Kingsley Opoku|
Board of directors
|Issue Date: ||2015|
|Publisher: ||Corporate Governance|
|Citation: ||Corporate Governance Vol. 15 No. 5 2015, pp. 623-640,|
|Abstract: ||Purpose – This study aims to examine the role the structure of corporate boards plays in the failure of the
firm. Specifically, it examines whether the remuneration committee is related to corporate failure in the UK.
Design/methodology/approach – The study uses 1,835 firm-year observations for 98 failed and 269
non-failed UK-listed non-financial firms between the periods of 1994 and 2011. This study used pooled
cross-sectional, fixed and random effects LOGIT models to estimate whether corporate failure is related
to remuneration committee in the UK.
Findings – The findings indicate that corporate failure is negatively related to the independence of the
remuneration committee chairman and remuneration committee’s effectiveness but not remuneration
committee’s presence, size and meetings. However, a positive and significant relationship was
observed between corporate failure and remuneration committee independence.
Practical implications – The findings of the study provide support for the appropriateness of agency theory
as analytical lens through which to study the efficacy of remuneration committee, especially the independence of
the remuneration committee chairperson, as a board monitoring device, in the context of corporate failure.
Originality/value – The paper adds to existing literature on corporate governance by establishing the
likely causes of corporate failure in the UK.|
|Description: ||An article published by Corporate Governance Vol. 15 No. 5 2015, pp. 623-640|
|Appears in Collections:||College of Arts and Social Sciences|
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