Does Boardroom nationality affect the performance of UK insurers?

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Abstract

Drawing on the board capital literature, we use a panel data design to investigate the effect of boardroom nationality on the profitability and solvency of property-casualty insurers operating in the United Kingdom (UK). We find that boardroom nationality influences corporate outcomes depending on the financial aspects being measured. For example, North American directors are linked with profitable outcomes, while European directors tend to be associated with better solvency. This reflects differences between the shareholder value corporate culture in North America and stakeholder approaches more common in Europe. Our results could help insurers, regulators, and others (e.g., investors) to better understand the potential performance implications of the appointment of directors of different nationality.
Original languageEnglish
Article number100923
Pages (from-to)1-18
Number of pages18
JournalBritish Accounting Review
Volume53
Issue number5
Early online date22 Jun 2020
DOIs
Publication statusPublished - 30 Sept 2021

Funding

We thank Chris Dawson and Thomas Roulet for their useful suggestions on improving the manuscript. The paper also benefited from the comments of participants at the 2016 British Accounting and Finance Association (BAFA) Conference, University of Bath, UK and attendees of seminars hosted by the Leeds University Business School, UK, Kings College, London, UK, and Coventry Business School, UK. However, the usual disclaimer applies.

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