Measuring internationality of board members via secondary data-a comparison of methods

Abstract

The assessment of the internationality of board members is based on the quality of the assessment of each individual member. In practice, different indices based on secondary data are used to capture the internationality of management boards. The CVs of 213 board members of DAX-listed companies were analyzed with regard to internationally relevant data with the aim to compare the quality of the refined benchmark index InEx NWE+WE P to a selection of indices used in practice in terms of their information value. The results show that the partly very simplistic indices used in practice lead to significant distortions with regard to the assessment of the internationality of individual board members and thus of the management boards as whole. In other words, the simpler indices don't use the information potential of the existing secondary data sufficiently, thus enticing the viewer to partly significant misinterpretations. © 2013 The Clute Institute.