1 The terms ‘independent’ and ‘outside’ are also employed; no one of the three terms is ideal and they are used indiscriminately in this article.

2 An observation from personal experience which finds support in Chandler, Chandler, Strategy and Structure,1962 The MIT Press.Google Scholar This study of organizational change in four large American corporations notes that awareness of inadequencies was experienced by executives close to the top but not in a position to make the changes they saw to be necessary. They were relatively young, not long in the positions they held at the time when they became interested in organizational change. More senior executives, Chandler suggests, resisted changes because of the psychological hazards of adjusting to new ways, new tempos and new duties.

3 See Tricker, R.I., The Independent Director, Tolley, 1978.Google Scholar This incorporates the findings of a survey commissioned by Deloitte, Haskins and Sells.

4 See Corporate Consulting Group, The Non‐executive Director in the UK; Parker, Hugh, Letters to a New Chairman, 1974;Google Scholar Booz‐Allen, Hamilton, The Responsibility and Contribution of Non‐executive Directors, 1974.Google Scholar

5 Though one US study tentatively supports the argument that boards dominated by non‐executives perform better than others. See Financial Times, 8 February 1986.

6 See Bank of England Quarterly, June 1985.

7 1200 would be needed if each of the 400 largest companies had its quota of three. There is no consensus about the length of time non‐executives should serve. One industrialist, active also as a non‐executive, has said three years is enough. Another has spoken of the three‐ or four‐year learning process which the newly‐appointed non‐executive needs. There is clearly some limited span of years during which an individual is likely to be effective in the role. If a period as long as eight years were regarded as suitable there would be an annual replacement need for 150. PRONED’s recruitment of 146 in a three‐and‐a‐half year period represents an average of 42 a year.

8 See the Management Research Group’s special research project report (1983) based upon extensive discussions with some 200 senior managers mainly at director level and upon a questionnaire enquiry in which 50 participated, about half of whom were managing directors. No indication of company size is given.

9 See survey on current thinking of chief executives (Heidrick and Struggles 1983). No indication of company size is given.

10 Sir Robert Clark in a speech at Leeds in 1983.

11 See survey by Booz‐Allen and Hamilton (1979)

12 Lewis Whyte as chairman of London and Manchester Assurance has described (Financial Times, 25 January 1977) his experience as a non‐executive of British Leyland. Unhappy about the way things were going, he advised that consultants’ advice should be sought, that advice was rejected and, he is reported as saying, unless one other non‐executive is of the same mind the individual operates under a severe handicap, and cannot do much except resign, and publicize the issue, but that achieves little.

13 Independence in defeat’ is the term applied (see Financial Times, 8 February 1986) to three non‐executives, out of five, who resigned over a proposal that one individual should occupy both the chairman and the chief executive roles.

14 See report of Committee to Review the Functioning of Financial Institutions, 1980.

15 Sir Leslie Smith as Chairman of British Oxygen.

16 Ken Dayton of the Dayton Corporation, Minneapolis. See his article in the Harvard Business Review, January—February, 1984.

17 By the Corporate Consulting Group in The non‐executive director in the UK in which they draw attention to the limitations of audit committees—divisive, emphasis on control rather than strategy, a misuse of scarce time—and advocate a strategic audit.

18 As was pointed out by Jonathan Charkham as Director of PRONED. See his article in Financial Times, 30 September 1983.

19 Unilever.

20 As was pointed out by one of the London partners of Arthur Anderson, who in the USA, are leading practitioners in this field.

21 See paper by Carr, Lord in Management Accountability and Corporate Governance, ed., Kenneth Midgley, 1982.Google Scholar

22 See speech by Smith, John, Financial Times, 11 02 1986 .Google Scholar

23 See John Scott and Catherine Griff, Directors of Industry, Polity Press, 1984. The thesis contains these elements: there is a network, an inner circle of finance‐capitalists (or co‐ordination controllers) involved in both banking and industry; capital is the resource on which all are dependent; and those in the inner circle ensure a certain amount of co‐ordination in business behaviour, a ‘new invisible hand which constrains the options available to corporate management’. Finance‐capitalists are those who are in the network whether as industrialists or as financiers. The notion of a network rests in part on a statistical study of what are called interlocks, and in part upon theoretical and empirical judgments about the social properties which these interlocks reflect. An interlock is the social relation which exists between two enterprises when one individual is a director of both of them; it is treated as an indicator in the study of power‐relations. In 1976 the biggest 250 companies (financial and non‐financial) provided 3091 directorships of which 591 were interlocks. These were occupied by 282 ‘multiple’ directors serving on the boards of two or more of the 250 companies. Of these 179 held full‐time executive positions in one of those companies and 103 were solely non‐executive. The significance of these interlocks has to be inferred. Five theoretical models have guided inferences in this field including finance‐capital, ‘developed, within Marxism’.

24 In the early 1970s I was one of that small group (which in 1976 numbered 189) of ‘multiple’ directors who were both a full‐time executive director in one of the large companies and a non‐executive director of at least one other, and over a thirty‐five year period was involved in a variety of roles in the UK and elsewhere: until 1958 as a non‐executive director of companies in France, Germany, Italy and Canada in which Courtaulds in the UK (where I was employed) had either complete or 50% ownership; then from 1958–79 as a full‐time executive director of Courtaulds with, for varying periods, non‐executive directorships in Koppers Inc (USA), in Richard Thomas and Baldwin (steel), Pye (electronics), Rolls Royce (1971) (aeroengines), and Dunlop (tyres). For the last few of these years it would have been difficult not to have some inkling of the existence of any small inner group of the kind the thesis requires.

25 See Knight, Arthur, Wilson Revisited, Policy Studies Institute and Anglo‐German Foundation, 1982;Google Scholar and ‘Ideas and action: how to improve industrial performance?’ in Policy Studies, April 1983.