Role of non-executive directors in corporate governance in the context of the codes on corporate governance
This thesis investigates the role of the Non-Executive Directors (NEDs) of the listed companies in the Alternative Investment Market (AIM) in the UK. Literature review on general theoretical framework on corporate governance and on the role of NEDs shows that there is a paradoxical compliance, that is the implementation of the statutory and non-statutory codes on corporate governance to minimise the corporate governance problems such as exploitation of the assets of shareholders by the management, corporate collapses, accounting frauds and so on yet the same problems emerging again and again. Therefore, the re-examination of the role of NEDs was identified as the intellectual problem for this thesis. A review into the existing research methodologies and research methods led to understand the need to design a research methodology for replication in the same research context or another research context to ensure reliability and validity of the research methodology and methods selected. Two research methods were chosen to collect data that is content analysis and postal questionnaire survey. The main theoretical framework used in this research is the Role Theory. The goal of this research is to understand the role of the NEDs in the context of the implementation of the non-regulatory Codes on Corporate Governance. The aim is to design the research methodology only after making a review into the strengths and weaknesses of the existing research methodologies into the role of the NEDs. The objective is to execute the same with a view to identify a model on the role of NEDs useful for the corporate sector in Sri Lanka. Thesis argues the rational of explaining the role of the NEDs in several categories such as strategy, advice, monitoring and service in previous research. This research finds a multiple number of tasks of NEDs as well as diversity among the tasks. Further it argues that the role of NEDs is conditioned by the expectations of the stakeholders as well as with their own cognitive disposition. Thesis contributes to knowledge in number of ways namely: (1) role of NEDs in AIM companies, (2) a review of general theoretical framework on corporate governance in the context of the implementation of non-regulatory codes on corporate governance, (3) a review of corporate governance experience in Sri Lanka and (4) some methodological developments for the content analysis technique namely use of Chi square test statistics to prove the protection of two properties of content analysis that is mutual exhaustiveness and mutual exclusiveness. Subject to several limitations arising from the inherent weaknesses in sampling and data collection, thesis certainly makes a contribution to understand the role of the NEDs in the modern corporation as well as to design a model on the role of NEDs in Sri Lanka which is planning to implement a non-regulatory code on corporate governance.
HD Industries. Land use. Labor, HG Finance
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