Direct and Ultimate Ownership Structures in the UK: An Intertemporal Perspective Over the Last Decade

20 Pages Posted: 9 Jan 2005

See all articles by Roberto Mura

Roberto Mura

University of Manchester - Manchester Business School

Maria‐Teresa Marchica

University of Manchester - Alliance Manchester Business School

Abstract

In this paper we analyse the evolution of the direct and ultimate ownership structure of a large sample of UK non-financial listed firms over the last decade. Our data show that while outsider ownership is relatively stable over time, managerial ownership shows a sharp decreasing trend and it is significantly lower in the presence of a large outside controller. Nonetheless, while average shareholding by executives confirms the decreasing trend, the opposite holds for non-executive directors. In addition, while average board size is rather constant in time, the proportion of non-executives is steadily increasing in time. As far as ultimate ownership is concerned, our data show that the existence of complex ownership structures in the UK is far from being negligible. We document that more than 10 per cent of the firms are owned via a complex structure and the degree of divergence between cash flow and control rights for these firms is around 11 per cent at the 10 per cent cut-off. Our data also suggest that the presence of complex structures is decreasing in time at any cut-off level. In addition, we report a decreasing trend over time of "widely held" firms. Finally, we show preliminary evidence of a negative impact of the divergence between cash flow and control rights on firm value.

Suggested Citation

Mura, Roberto and Marchica, Maria‐Teresa, Direct and Ultimate Ownership Structures in the UK: An Intertemporal Perspective Over the Last Decade. Corporate Governance: An International Review, Vol. 13, No. 1, pp. 26-45, January 2005. Available at SSRN: https://ssrn.com/abstract=645426

Roberto Mura (Contact Author)

University of Manchester - Manchester Business School ( email )

Crawford House
Oxford Road
Manchester, Lancashire M13 9PL
United Kingdom
+44 (0) 161 275 4023 (Fax)

HOME PAGE: http://www.robertomura.com

Maria‐Teresa Marchica

University of Manchester - Alliance Manchester Business School ( email )

Booth Street West
Manchester, M15 6PB
United Kingdom

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