Research by Dr Amama Shaukat Published by the Business, Energy and Industrial Strategy (BEIS) Select Committee of the Parliament
Findings of research studies by Dr Amama Shaukat on corporate governance regulation in the UK underpin two written submissions to the recent Corporate Governance inquiry by the Business, Energy and Industrial Strategy (BEIS) Select Committee of the Parliament.
In one of these studies Dr Shaukat provides research evidence that throws into question the UK corporate governance code (the Code) recommendations that discourage the presence of non-independent directors on corporate boards. While the Code considers past employees to be non-independent (and hence undesirable on boards), Dr Shaukat finds that the presence of such directors on boards has a positive association with firm value.
In another study Dr Shaukat and her co-author, Professor Grzegorz Trojanowski (University of Exeter), find that while on average adherence to the board-related Code recommendations is associated with better firm operating performance, firms also at times use the Code flexibility opportunistically. Voluntary reduction in compliance with board recommendations is found to be associated with deteriorating firm performance. Moreover, in firms where compliance decreases, the axe tends to fall most often on the independence of the key board monitoring committees. These findings raise questions about the effectiveness of the voluntary corporate governance regulation in the UK.
Full text of submissions can be found at the following websites: