Diversity on British Boards and Personal Traits That Impact Career Progression From AIM Towards FTSE 100

Mateus C., Mateus B. I. and Stojonovic A. (2020), Diversity on British Boards and personal traits that impact career progression from AIM towards FTSE100, Corporate Ownership and Control, forthcoming

39 Pages Posted: 7 Jul 2020

See all articles by Cesario Mateus

Cesario Mateus

Aalborg University Business School

Irina B. Mateus

Aalborg University

Alex stojanovic

affiliation not provided to SSRN

Date Written: June 12, 2020

Abstract

This study proposes a new approach to examining executive remuneration and manager characteristics disaggregated by market index peer clusters and analyses personal attributes that differentiate managers across companies of different market caps (proxied my market indices such as FTSE100, FTSE250, FTSE SmallCap and AIM). Our sample is composed of biographical data on 790 executive directors from 125 UK financial firms covering a 2004-2016 time period. The results show that network and education are the most important factors for career progression. On average, FTSE 100 executive directors are three times better connected and two times better educated than FTSE SmallCap and AIM board members. The larger the firm, the more diverse the board with more international (non-British) and female directors (even though male executives mostly dominate). Higher position is associated with greater age, while new executives tend to be younger and better connected. We highlight a change in the new managers’ skill-set after the financial crisis which may presumably be explained by risk aversion. New directors appointed after 2008 are, on average, older and better educated. Even though after the crisis we document that all the boardrooms, except FTSE SmallCap, appear to have become more gender diverse, the female presence in the boards is scarce and the highest number of women was mainly employed during the financial crisis. After 2008, British boards have become less nationality diverse. Thus, for the purpose of maintaining companies’ competitive advantage in increasingly diverse markets, it requires further attention from policy regulators.

Keywords: Board composition, board diversity, personal characteristics, executive directors, remuneration, peer benchmarking

JEL Classification: G30, G38

Suggested Citation

Mateus, Cesario and B. Mateus, Irina and stojanovic, Alex, Diversity on British Boards and Personal Traits That Impact Career Progression From AIM Towards FTSE 100 (June 12, 2020). Mateus C., Mateus B. I. and Stojonovic A. (2020), Diversity on British Boards and personal traits that impact career progression from AIM towards FTSE100, Corporate Ownership and Control, forthcoming, Available at SSRN: https://ssrn.com/abstract=3625436

Cesario Mateus (Contact Author)

Aalborg University Business School ( email )

Aalborg
Denmark

Irina B. Mateus

Aalborg University ( email )

Fredrik Bajers Vej 7E
Aalborg, DK-9220
Denmark

Alex Stojanovic

affiliation not provided to SSRN

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