Derivatives and the non-executive director

M. van der Nat, A.A. Buckley

Research output: Contribution to JournalArticleAcademic

Abstract

Do non-executive directors have the wherewithal to overview a corporation's integrity, quality of performance and management in the area of derivatives policy? In a survey of the understanding and monitoring of derivatives in a small sample of quoted companies, we found disturbing levels of ignorance among independent directors. Whilst three quarters of non-executive directors surveyed favoured the use of derivatives in appropriate circumstances, namely hedging, over two-thirds confessed to an inadequate knowledge on the topic of derivatives. Also, we found a series of naïve and dangerous views expressed by many participants in our survey of derivatives and the non-executive director. © 2003 Elsevier Science Ltd. All rights reserved.
Original languageEnglish
Pages (from-to)389-397
Number of pages9
JournalEuropean Management Journal
Volume21 June
Issue number42-43
DOIs
Publication statusPublished - 2003

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