RT Journal Article
SR Electronic
A1 Muhrtala Tijani, Oladipupo
A1 Sanni, Mubaraq
A1 Ishola, Karimu Adebayo
T1 Multiple Directorships and Related Parties Transactions: The Weakness of Numbers
JF European Journal of Business Science and Technology
YR 2015
VO 1
IS 2
SP 137
OP 148
DO 10.11118/ejobsat.v1i2.12
UL https://ejobsat.cz/artkey/ejo-201502-0006.php
AB We examine whether the presence of outside directors with multiple boards seats influence firms related-parties transactions. These non-executive directors with vast skill, experience, knowledge, prestige and shared networks are part of major Boards Committees responsible for key corporate policies, strategy and management. Subsequently, it remains an untested assumption whether the outcome of related parties' transactions are influenced by the presence of this class of 'busy directors'. We obtain data from 142 companies across five sectors between 2009 and 2014 and conduct analysis using a two-stage multiple regression. The results reveal that the existence of multiple directorships on boards failed to evolve as predictors for related parties' transactions. We thus conclude that the presence of these 'busy directors' on boards does not alter a firm's related parties' transactions significantly. Overall, this may suggest that the influence of executive directors and other outside directors and key management personnel do play an important role in explaining organizationally complex strategic decisions in this regard.