To all those reading this I am David Gibbs; I am a Lecturer in Company and Commercial Law at the University of Hertfordshire.

I created this blog as a general out-let of ideas for my research, as well as keeping those interested up-to-date on my research and general interests.

I completed my PhD thesis at the University of East Anglia in 2014. The thesis was recommended for the award of PhD with no corrections. My external examiner was Prof. Simon Deakin (Cambridge) and internal examiner was Prof. Morten Hviid.
My PhD research centred on directors' duties and company law. The thesis was titled 'Non-Executive Self-Interest: Fiduciary Duties and Corporate Governance'. It was a doctrinal and empirical study on whether self-interest was suitably controlled amongst non-executive directors.

My supervisors were Prof. Mathias Siems, Prof. Duncan Sheehan, Dr. Sara Connolly and Dr. Rob Heywood

All opinions of any existing or future blogpost are my own. They do not necessarily represent the views of any of my associated institutions.
ORCID 0000-0002-6596-8536

Friday, 1 July 2011

Bank Governance and Multiple Directorships

OK, so I am beginning to see the light at the end of the data mining tunnel. Another two weeks and hopefully it will be done.

Amid the data mining a recent blog post from Robert Goddard on Corporate Law and Governance noted that a report from The Financial Times, which also discussed female quotas on boards, highlighted that a draft EU directive suggested caps on directors of banks serving on other boards - no more than two non-executive positions for executives and no more than four executive positions for anyone.

My data compromising of 30 firms from the FTSE 100 suggests that this would have little to no impact on English directors, especially those on banking boards. Anecdotal evidence suggested that where directors hold more than three positions most of those positions are held on boards abroad rather than in the UK.

As for multiple directorships or interlocks on banking boards it seems such a proposal will have little impact on UK banks. For example, The Royal Bank of Scotland's (RBS) executive directors in 2006 held between them three multiple directorships with a total of seven executives serving throughout that year (0.42 directorships per director). For 2010 there were no multiple directorships held by any executives throughout the year.

Non-executives portray a potentially different story; but again using RBS as an example throughout 2006 eleven non-executives served on the board with a total of twenty-seven other directorships held between them (2.45 per director). In 2010 however, ten non-executives served throughout the year with a total of sixteen other directorships (1.6 per director).

Although interlocks are unsurprisingly higher for non-executives and not uncommon amongst executives (although RBS is perhaps not the best example of this) neither seem to trouble potential thresholds suggested by the EU.

However, just because UK boards rarely break the suggested thresholds one would still not support a cap on interlocks. Boards need to be dynamic to respond to changing conditions and trying to straight-jacket boards is not a feature of a modern economy.  

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