Director categorisation and monitoring efficiency

Document Type

Article

Publication Date

1-1-2023

Abstract

This paper examines the impact of director co-option on the relationship between board structure and firm monitoring. Though non-co-opted independent directors enhance internal monitoring, co-opted independent directors seem to be the worst monitors. We do not observe a substantial difference in the monitoring functionality of co-opted and non-co-opted inside board members. Our paper suggests that co-opted independent directors are the main driving factor behind the converse association between co-opted boards and internal monitoring. We conclude that the efficiency of board monitoring should not be analysed solely based on director classification or director co-option, but rather a combination of both.

Publication Title

International Journal of Business Governance and Ethics

First Page Number

310

Last Page Number

329

DOI

10.1504/IJBGE.2023.130097

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