Diversity on British boards and personal traits that impact career progression from AIM towards FTSE 100

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Cesario Mateus ORCID logo, Irina B. Mateus ORCID logo, Alex Stojanovic ORCID logo


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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 FTSE 100, FTSE 250, 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). The 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

Authors’ individual contribution: Conceptualization – C.M., I.M., and A.S.; Methodology – C.M. and I.M.; Formal Analysis – C.M., I.M., and A.S.; Writing Original Draft – C.M. and I.M.; Writing – Review & Editing – C.M. and I.M.

Declaration of conflicting interests: The Authors declare that there is no conflict of interest.

JEL Classification: G30, G38

Received: 08.04.2020
Accepted: 30.06.2020
Published online: 01.07.2020

How to cite this paper: Mateus, C., Mateus, I., & Stojanovic, A. (2020). Diversity on British boards and personal traits that impact career progression from AIM towards FTSE 100. Corporate Ownership & Control, 17(4), 183-199. http://doi.org/10.22495/cocv17i4art15