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Redmond, John
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Redmond, John
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Redmond, John
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Now showing 1 - 4 of 4
- PublicationHow much should boards know?When companies fail boards get blamed – either they knew and were complicit, or did not know and were incompetent. At the heart of corporate governance is information asymmetry between various parties. The UK Code of Governance sets a high standard for board information governance, placing a particularly heavy burden on chairmen, stating that ‘the chairman is responsible for ensuring that the directors receive accurate, timely and clear information’. The Code goes on to state that ‘management has an obligation to provide such information, but directors should seek clarification or amplification where necessary’. Corporate governance failure is almost always accompanied by information asymmetry whereby the non-executive directors were not aware of what was going on.
326 - PublicationShould Non-Executive Directors Know as Much as Managers?Information asymmetry – the difference between company-specific information available to management and what is presented to boards – is often considered an impediment to board effectiveness. In some cases, governance failures arise because information is deliberately withheld from boards. Most boards work well, however, notwithstanding the information gap between managers and non-executive directors.
254 - PublicationAccountability Processes in Boardrooms: A Conceptual Model of Manager-Non-Executive Director Information AsymmetryPurpose: Understanding the influence of information and knowledge exchange and sharing between managers and non-executive directors is important in assessing the dynamic processes of accountability in boardrooms. By analysing information/knowledge at multiple levels, invoking the literature on implicit/tacit and explicit information/knowledge, we show that information asymmetry is a necessary condition for effective boards. We introduce a conceptual model of manager-non-executive director information asymmetry as an outcome of our interpretation of information/knowledge sharing processes amongst board members. Our model provides a more nuanced agenda of the management-board information asymmetry problem to enable a better understanding of the role of different types of information in practice. Design/methodology/approach – Our analysis of information/knowledge exchange, sharing and creation and the resultant conceptual model are based on the following elements: (i) manager-non-executive director information/knowledge, (ii) management-board information/knowledge and (iii) board dynamics and reciprocal processes converting implicit/tacit into explicit information/knowledge. Findings – Our paper provides new insights into the dynamics of information/knowledge exchange, sharing and creation between managers and non-executive directors (individual level)/between management and boards (group level). We characterise this as a two-way process, back-and-forth between managers/executive directors and non-executive directors. The importance of relative/experienced "ignorance" of non-executive directors is revealed, which we term the "information asymmetry paradox". Research implications – We set out key opportunities for developing a research agenda from our model based on prior research of knowledge conversion processes and how these may be applied in a boardroom setting. Practical implications – Our model may assist directors in better understanding their roles and the division of labour between managers and non-executive directors from an information/knowledge perspective. Originality/value – We apply Ikujiro Nonaka’s knowledge conversion framework to consider the transitioning from individual implicit personal to explicit shared information/knowledge, to understand the subtle processes at play in boardrooms influencing information/knowledge exchange, sharing and creation between managers and non-executive directors.
1449Scopus© Citations 34 - PublicationInformation Asymmetry is Good for Effective BoardsCommentators often complain that non-executives need more information. But recent research suggests that it is information asymmetry that actually makes non-executives effective.
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