Sampling Issues

This section discusses all issues related to sampling methods used for the study and explains sample selection, sample size, key informants, reminders and response rates as well as pre-testing procedure and the issue of non-response bias.

4.5.1 Population and Sample Selection

Trying to define the population of the study in a specific country, it would be ideal to manage and get responses from all board members of all businesses in the UK, but for obvious reasons this is nearly impossible. Thus, the initial plan for the thesis was to study the boards of top UK listed companies, which were considered to be an appropriate sample for a study on corporate governance issues. The reason for this is that it was expected that their directors would have the desired knowledge to respond on the various issues of the study. Therefore, it was decided that the sample to be used would be all the board members of FTSE 350 companies. This plan was soon abandoned, as although the 350 firms could be easily identified, the email addresses of their board members were not available.

4.5.1.1 Sample Size Obtained with Email Contacts

By exhausting all available options, access to email addresses of board members was acquired through OneSource Company. The study was conducted by sending the survey to different batches, as the low response rate (because of the nature of the sample) lead me to acquire a second batch of contacts.

Initially, the company provided a database of 2,313 contacts from 326 companies that had turnover of over GBP 1.5 billions. Trying to justify the sampling method used, it

can be argued that the study follows the non-random quota sampling. This results from the fact that a quota was used in selecting companies from the UK—over GBP 1.5 billion turnover—and in turn only available email contacts were used, which makes the sampling non-random.

After careful examination, I found that only 1,464 were complete and appropriate, as many contacts were not from board members and some contacts did not have the email address available. As a result, 1,464 emails formed the 1st batch of the study. However, as it was expected when the first email was sent to these contacts, 586 emails returned and were marked as undelivered. This resulted to a sample size of 878 contacts from this batch that received the survey invitation. This means that only 60% of the initial contacts acquired could reach a respondent.

As this number of contacts was not considered as sufficient and the expected response rate was already low due to the nature of the key informants (board members), another batch of contacts was obtained from OneSource Company, this time by significantly lowering the turnover criterion to get enough contacts and achieve a satisfactory response rate from the increased sample size. As such, with the quota/criterion of turnover being reduced to GBP 5 millions, 2,393 additional contacts were obtained.

These were all complete and appropriate, however when the initial email was sent to these contacts, 826 returned as undelivered. This results in 1,567 delivered emails, which seems to form a slightly more updated batch (65.4% compared to the 60% of the 1^st batch), a note that was already acknowledged by the people in the database company.

To conclude, the sample size based on the two batches was 2,445. With 75 responses—collected during February-March 2013—the response rate of this sample was 3.0%, which is low but corroborates other researchers who claim that there is a great difficulty in collecting data from board directors (e.g. Machold and Farqular, 2013; Daily et al., 2003; Leblanc and Schwartz, 2007; Zahra and Pearce, 1989). As stated by Zahra and Pearce (1989: 324) “this is, in fact, one of the most challenging areas for future research in the contribution of boards”, which seems to stand true until presently. The summary of contacts and delivered emails is presented in Table 4.6.

Table 4.6: Summary of Email Contacts

Batches Number of

Contacts

Undelivered Emails

Delivered Emails

1^st batch 1,464 586 878

2^nd batch 2,393 826 1,567

Total 3,857 1412 2,445

4.5.1.2 Increasing Sample Size Using Social Media (LinkedIn)

Since the responses collected from the email invitation to directors were found to be limited—for statistical analysis—it was attempted to collect more data from board directors that were members of relevant LinkedIn groups. This would increase the total number of respondents, even though it can be regarded as a limitation to the possible heterogeneity of the sample. Table 4.7 presents the various groups where the survey invitation was posted; a short description of the groups and the number of their members are also provided. From this additional effort, 40 extra responses were collected, which resulted in a total number of 115 responses.

Table 4.7: A Summary of LinkedIn Groups Accessed for Further Data Collection

Group Name Short Description Members

Board of Directors individuals who currently sit on a corporate board of directors and those who are qualified to do so and aspire for election to such a board.

4,258

Boards & Advisors

Membership in this group includes (i) external advisers, (ii) internal advisers and (iii) current or prospective board and committee members.

5,755

Company Directors and Governance

Professionals

This group is a community of interest focused on boards and governance. Membership is open to all board members, aspiring board members and governance practitioners.

2,251

Company Directors Networking

This group is open to IOD Members and by invitation from Group members.

1,923

Corporate Governance

Corporate Governance Portal - a virtual community where all is found on Corporate Governance. An independent investment ratings agency and research firm focusing on corporate governance, board of director effectiveness and board risk.

2,185

Corporate Governance Contact Point

The purpose of this group is to bring together experts on Corporate Governance in different regions of the world, in order to share the latest news on the matter.

598

Governance Committee Members of our community of corporate 253

Members of Corporate Boards

directors who serve on governance committees of corporate boards inspire each other with information, insights and other resources to

This is a group for current and aspiring Irish based Non Executive Directors (NED's) who are seeking new opportunities, share

experiences, network and promote the role and benefits of a Non Executive.

486

NED/ NXD – Non Executive Directors – Global

This is a group for current NED's/NXD's &

individuals wishing to aspire to being a Non Executive Director. This will create a unique platform for open discussions and networking opportunities.

1,940

Next Director

Our main objective is to build a platform where company directors from around the world and with a diverse range of experience and

aspirations can engage with each other, seek and contribute advice and share ideas and information.

4,909

Non Executive Director Network – England

The network has been set up to provide a forum for discussion between non-execs, mentors for non-execs, and people interested in taking up a non-executive position.

NXD is a group of experienced, successful and practical business leaders who want to add value to SME businesses.

297

The Financial Times Non-Executive Directors’ Club

This group is a forum for all aspiring and experienced non-executive directors to discuss boardroom issues and share thoughts, ideas and experiences - and to receive articles and items of interest

929

The Institutional Corporate Governance Network

This group is for people who are involved in corporate governance including activists,

As mentioned in section above, it was decided for this thesis, to collect data from any directors sitting in the board. The reason was simply that all directors of a board are

considered to be knowledgeable of the constructs of interest. In addition, it was believed that collecting responses from any directors—i.e. CEOs, Chairpersons, executives and independent members—would be important in capturing the perceptions of the roles for all members of the board. After collecting the data, it was found that majority of respondents were executive members of the board, including CEOs and the rest of the responses came from independent members.

4.5.4 Reminders and Response Rates

The data collection for the current thesis has proven to be very challenging and it is argued that the reason is the profile of the respondents. However, among other techniques used to motivate respondents in completing the survey—discussed in this chapter (e.g. pre-notification)—follow up messages are also thought to improve the response rate of any kind of survey. As such, after sending the pre-notification email, the initial survey invitation was sent that was followed by two reminders and one final call in a period of five weeks. This resulted in 75 responses that were later complemented with the 40 responses from LinkedIn, which made a total of 115 responses.

The criterion used to decide which questionnaire will be considered as complete was whether the respondent moved through all pages using the navigation buttons, clicked the ‘Next’ button on every page, and answered all compulsory questions to finally click

‘Done’ (http://help.surveymonkey.com/articles/en_US/kb/What-is-a-partial-Total-Started-or-finished-Total-Finished-response).

The numbers of collected responses from the different stages of the survey were recorded as follows:

Table 4.8: Responses Resulted from Different Waves

Email Wave Responses

Survey Invitation 44

1^st Reminder 13

2^nd Reminder 12

Final Call 6

Linked In 40

Total 115

4.5.5 Pre-testing Procedure

The survey instrument was pretested among academics that were regarded as experts in the field of corporate governance. As such, an email was sent to selected academics from the UK and the United States asking them to provide their feedback and comments on the quality and presentation of the questionnaire that was attached in document format. All selected academics had either numerous relevant publications on corporate governance, or were members of corporate governance interest groups (e.g.

BAM SIG). Their comments were extremely helpful and constructive and were taken into account in the final online version of the questionnaire (e.g. Prof. Amy Hillman and Prof.

Stephen Perkins). This approach—also used by Hambrick (1981: 261)—was used to satisfy the criterion of content validity.

4.5.6 Non-Respondents

While conducting the survey through email, there were a few board directors that replied to the survey invitation, stating that they do not want to participate. In total, 37 emails were received during the collection process refusing to participating and asking to be excluded from the mailing list. The main reason for the majority was the organisation’s policy of not participating in surveys, while other reasons included director’s retirement or changed position and lack of time.

4.5.7 Summary

Section 4.5 described the sampling approach used in the thesis, which followed two different steps. Due to the difficulty experienced in collecting data from respondents through email, LinkedIn was used as an additional method and the total responses from the two methods was 115. The following section briefly describes the statistical methods used to analyse the data collected.