MPS, Outside Interests, and Corporate Boards: Too Busy to Serve?

Abstract

AbstractThe corporate governance literature has often been concerned with whether individuals with a high number of board directorships are too busy to serve in their role. In the UK, many MPs also hold positions on boards of directors. This raises the question of whether MPs with board memberships are too busy to serve their constituents, party and parliament. To address this question, we construct a network of directors (including MPs) and the firms they are associated with. We then draw on measures from social network analysis to capture how embedded these individuals are in the UK corporate system. We employ a regression approach to examine the relationship between MPs’ position in the corporate system and their participation in Parliament. We find that that some positions within the corporate network are associated with increased participation and others with decreased participation. MP participation increases when they have high numbers of directorships or high levels of corporate opportunity, but it decreases for those who are deeply embedded in the corporate system, sitting on the boards of well-connected firms. The latter are potentially ‘too busy’ to serve.