Managerial Ownership, Board Structure and Firm Value: The UK Evidence

See Bhagat, 1996, John and Senbet (1998) and Lin

Lorsch Lipton, 1992, suggest that the size of the board should be limited to a maximum of ten directors and the optimal should be eight or nine

However, at the 25% ownership level the magnitude of the response of performance to given changes in managerial ownership is substantially lower than that of the 0 to 5% level. In addition, when an accounting measure of performance

Morck et al�s sample is made up of large firms (371 Fortune 500 firms). In contrast, McConnell and Servaes sample, consisting of 1173 firms in 1976

For Example, 1998, ) show that, in the wake of poor performance, disciplinary actions are undertaken against management but directors owning large stakes successfully block board restructuring

See Goergen, 1998

Extel Financial is a database that reports all the information contained in the financial statements and stock market data of all UK companies

1999, For example, the results of Ang, Cole and Lin (1999) are based on cross-sectional analysis of 1,708 unquoted companies in 1992. Short and Keasey (1999) analyzed 225 UK companies. Morck et al (1988) selected 371 large US companies from the Fortune 500, Holderness et al

other than directors, that individually holds at least 3% of a company's ordinary shares. This level is set by disclosure rules (Company Act 1995, Sections 198 and 199). The threshold was 5 per cent from 1985 to 1989, The variable BLOCK represents the sum of all the stakes held by blockholders

1997, There are a number of ways of computing Tobin's q (see Lewellen and