Ownership and Board Structures in Irish plcs

We examine the relation between ownership and board structure in Irish plcs. We test the substitution and bargaining hypotheses regarding effects of ownership on board structure. We find that the percentage of share capital owned by executives is negatively related to the percentage of the board comprised of non-executive directors and the likelihood of having a non-executive as chairman. We interpret this as evidence in favour of the bargaining hypotheses. Further indirect evidence in favour of this hypothesis is provided by a strong negative relation between the monitoring capacity of a board and company size. In contrast the evidence we report in favour of the substitution hypothesis is weak.