Corporate Governance in the Alternative Investment Market of the London Stock Exchange

Neeta Shah

Research output: ThesisDoctoral Thesis

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This thesis examines corporate governance in the Alternative Investment Market (AIM) during the period 2008 to 2010. The thesis considers how corporate governance should be defined, key theories in corporate governance, development of corporate governance in the United Kingdom, factors that explain ownership structure and the development of AIM since 1995. The empirical research explores three themes.
First, using hand-collected data, involves the construction of corporate governance score covering corporate governance disclosures such as board committees, board independence, board power, board transparency, related party transactions and remuneration types. The main objective, here, is to evaluate the commitment to minimal requirements for good corporate governance. Corporate governance score is regressed against performance variables such as Tobin’s Q (TQ) and return on assets (ROA). The regressions show that the corporate governance score is positively associated with company performance but that the relationship is not statistically significant.
Second, involves the investigation of the relationship between ownership type and company performance. The findings show that levels of ownership and performance are negatively associated. The relationship was influenced by company variables such as size, cash, debt, and corporate governance variables such as duality of the chief executive officer (CEO) and the chairman roles and the percentage of independent directors. The statistical significance of the relationship varies according to ownership type. The results demonstrate the presence of monitoring and expropriation effects.
Third, involves the examination of the determinants of CEO pay. Company size consistently shows association with CEO pay. The relationship between CEO pay and company performance depends on the proxy used to measure performance: TQ gives a positive and statistically significant result, whereas ROA gives a negative coefficient and not statistically significant. The impact of institutional shareholdings also differs depending on which proxy is used to measure performance
Original languageEnglish
Awarding Institution
  • Royal Holloway, University of London
  • Napier, Christopher, Supervisor
  • Davison, Jane, Advisor
Thesis sponsors
Award date1 Nov 2014
Publication statusUnpublished - 2014


  • Corporate Governance, Alternative Investment Market

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