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Investigating the Development of the Internal and External Service Tasks of Non-executive Directors the case of the Netherlands (1997–2005) Download

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During the last decade, globalisation and liberalisation of financial markets, changing societal expectations and corporate governance scandals have increased the attention for the fiduciary duties of non-executive directors. In this context, recent corporate governance reform initiatives have emphasised the control task and independence of non-executive directors.

However, little attention has been paid to their impact on the external and internal service tasks of non-executive directors. Therefore, this paper investigates how the service tasks of non-executive directors have evolved in the Netherlands.

Data on corporate governance at the top-100 listed companies in the Netherlands between 1997 and 2005 show that the emphasis on non-executive directors’ external service task has shifted to their internal service task, i.e., from non-executive directors acting as boundary spanners to non-executive directors providing advice and counselling to executive directors.

This shift in board responsibilities affects non-executive directors’ ability to generate network benefits through board relationships and has implications for non-executive directors’ functional requirements.

Submitted On:

16 Jul 2011

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Submitted On:

16 Jul 2011