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The purpose of this paper is to investigate two research questions. Is internal control system (ICS) disclosure, as a monitoring mechanism, associated with the characteristics of the board of directors, particularly the audit committee as the main board committee devoted to the effectiveness of ICS? Does the regulatory environment, particularly the regulation on ICS disclosure as an external governance/monitoring mechanism play a role in shaping the relationship between board monitoring and ICS disclosure and, if so, how?

The authors study the ICS disclosure of 149 companies listed in four European financial markets (London, Paris, Frankfurt and Milan), each with its own regulations about ICS disclosure, during a six-year period (2003-2008).

The findings support an inverse association between the extent of ICS disclosure and the proxies for board monitoring. The authors also find a statistically significant negative relationship between board monitoring and substantial ICS disclosure but no relationship between board monitoring and formal ICS disclosure. The evidence also shows that the regulatory environment moderates the relationship between board monitoring and ICS disclosure by introducing trade-offs among monitoring mechanisms.

An important caveat of the research is that it does not explore if and how investors use ICS disclosure to evaluate the firm.

The authors propose a framework for the analysis of ICS disclosure that overcomes limitations of previous literature that has neglected the importance of the content beyond the extent of ICS disclosure. Through this framework researchers, practitioners and standard setters are able to separate merely descriptive, formal un-useful disclosure (boilerplate information) on the composing elements of the ICS from substantial disclosure regarding the functioning of the ICS (monitoring function).

The authors also provide evidence that the relationship between board monitoring and ICS disclosure varies with the content of the information communicated, thus offering guidance for future research not to focus on measuring the extent or quantity of disclosure but on the variety and complexity of the information communicated.

Prior studies provide mixed evidence on the association of board busyness and firm productivity. Thus, this paper empirically analyzes how board busyness affects firm productivity.

To measure board busyness, this paper computes the percentage of directors on a board who sit on three or more boards. Furthermore, to calculate firm productivity, the paper employs data envelopment analysis.

Findings demonstrate that the association of board busyness and firm productivity (association) is generally negative and statistically significant but economically insignificant. In this respect, the findings reveal that the association is negative (positive) and both statistically and economically significant for firms having higher monitoring (advising) needs. Moreover, the findings demonstrate that regulatory oversight (1) weakens the general negative association; (2) changes the direction of association from negative to positive, for firms having higher monitoring needs; and (3) does not influence the association, for firms having higher advising needs.

Taken together, the findings indicate that the association of board busyness and firm productivity is conditional to monitoring/advising needs and regulatory oversight. As such, the findings enrich the current debates on the association. Furthermore, the findings offer novel perspectives to enrich the regulatory frameworks of countries which are constraining multiple directorships.

The purpose of this paper is to trace a legal evolution of the monitoring board and to reveal what brought the evolution and what is expected to emerge. The paper points to unique complementarities in Japanese corporate governance institutions and norms which will affect how the monitoring board performs its functions.

Analysis is based on texts on corporate governance legislations in Japan from the revision of Commercial Code in 1950 to the revision of Companies Act in 2014. Other sources include Tokyo Stock Exchange regulations, White Paper on Corporate Governance and other academic literatures on Japanese corporate governance.

Changes of non-legal institutions and norms in Japanese corporate governance necessitated legal reforms toward the monitoring board. Persisting institutions and norms, in particular lifetime employment, influences how the monitoring board performs its functions in Japan.

This paper explains how the evolution of the monitoring board in Japan emerged and what will cause different expected functions of the monitoring board in Japan and other jurisdictions.

Board monitoring should affect a firm's access to debt financing because it improves firm performance and the board is ultimately responsible for the firm's debt. In this study, we show empirically that access to debt financing indeed benefits in two ways from board monitoring: directly from the monitoring and indirectly from improvement in performance. The methodological challenge is in separating the two effects from each other and from those of other drivers of debt financing.

This paper aims to examine the relationship between internal corporate governance mechanisms and board performance in monitoring roles.

A survey questionnaire was used to gather data on board performance, while annual reports were employed to gather data on internal corporate governance mechanisms. Data for board performance were based on 112 directors who represent the companies.

Factor analysis extracted two dimensions of monitoring roles: management oversight roles and performance evaluation roles. Non‐independent non‐executive directors and managerial ownership were found to be positively related to both dimensions of monitoring roles, while the multiple directorships of non‐executive directors were negatively related to management oversight roles.

The paper establishes the need for regulators to pay particular attention to multiple directorships, which are commonly practiced in public listed companies. The contribution of non‐independent non‐executive directors rather than independent directors in monitoring roles calls for further research. Regulators need to emphasize the performance evaluation roles of the board of directors (BOD), as much emphasis has been given to management oversight roles.

The study contributes to the literature concerning monitoring roles as it shows that management oversight roles and performance evaluation roles are differentiated. The findings provide an avenue for the contribution of non‐independent non‐executive directors and multiple directorships in monitoring roles.

Responding to the call for research into the behavior of family companies to provide better understanding of corporate governance, this paper aims to examine the impact of boards’ effectiveness on the investment in monitoring costs (i.e. audit fees, internal audit function budget and executive remuneration) and how this relationship is moderated by family control.

A sample of 2,176 firm-year observations of Malaysian listed companies is used. The ordinary least square regression is used to examine the associations. Additional sensitivity tests are performed.

The study finds that there is no relationship between boards’ effectiveness and the demand for monitoring costs for the full sample. However, the findings of sub-samples (family and non-family companies) indicate that a family company with an effective board is less likely to invest more in monitoring, suggesting that the complementary association between the board’s effectiveness and investment in monitoring is a more dominant relationship than the substitution relationship in non-family companies. These findings show that the boards of directors of Malaysian family companies perform a deficient monitoring role, where the presence of family controlling shareholders in management may reduce their independence and efficiency in performing their monitoring role. The findings remain robust after performing additional sensitivity tests.

This paper contributes to the literature on corporate governance in a unique setting (family companies), where conflict of interest is created between controlling insiders and minority shareholders (Type II agency problem). It provides insight for Malaysian policymakers in assessing the issue of expropriation in family companies and enhancing the policy related to its boards.

Studies on corporate boards examine how social ties between the CEO and independent board members affect the effectiveness of board monitoring. Much evidence suggests that social connections between the CEO and independent directors are associated with inadequate monitoring and lower firm value (Hwang and Kim, 2009; Fracassi and Tate, 2012). In this study, the authors note that social connections of the independent directors are of different nature and thus should not be treated as a homogeneous group; that is, the nature of connections among directors can be quite different from that between the CEO and directors, which is the primary focus of previous studies.

The authors classify independent directors into four mutually exclusive groups based on their social connections to the CEO and other independent board members and examine what role each type of connection plays in corporate monitoring using panel data and cross-sectional fixed effect regressions.

The authors find that Only_CEO%, the proportion of independent directors who are connected only to the CEO, is negatively associated with monitoring intensity. Specifically, firms with higher Only_CEO% have larger CEO compensation, lower likelihood of dismissing the CEO, more co-opted board and worse firm performance. In contrast, No_CEO_Ind%, the proportion of independent directors who have no connection to either the CEO or other independent directors is associated with more effective monitoring. These findings suggest that independent directors with different degrees of social connections exhibit different monitoring qualities.

When more independent directors, who are connected exclusively to the CEO, are on the board, they consistently deliver low monitoring quality. However, when more independent directors with no connections to either the CEO or any independent directors are on the board, they enhance monitoring quality. These findings can be used to construct board structures with more effective monitoring ability.

This paper extends the literature on social networks in corporate finance. The authors show that independent directors with exclusive connections to other independent directors do not have a significant effect on board monitoring, but those truly independent directors are associated with better monitoring quality. These findings suggest that different types of social connections of independent directors play a different role in board monitoring and help extend our understanding of the function of social connections of independent directors in corporate governance.

The effect of corporate governance on firm performance has long been of great interest to financiers, economists, behavioural scientists, legal practitioners and business operators. Yet there is no consensus over what constitutes an effective corporate governance mechanism that induces agents or managers to consistently act in the interest of share value optimisation. The purpose of this study is to develop a model to resolve an on‐going issue in financial economics: how can CEOs be effectively monitored by the board of directors?

A survey of the literature on corporate governance and the relationship between board composition and financial performance leads to the development of the proposed model, which is based on a framework which takes into account the probability of success representing a CEO's ability, and the active monitoring function (which is represented by the numbers of control visits) carried‐out by the directors.

The design of the model is aimed at identifying an optimal level of monitoring, which will maximise share value, to guide internal and independent directors.

The model has limitations: it does not address the input of other directors and it focuses solely on the monitoring function, even though boards also play important roles in providing information and advice to management.

The finding of this study contributes to the Agency Theory debate, in essence that the board monitoring of CEO will improve the performance of the CEO and avoid possible conflict of interests.

The purpose of this paper is to examine the effects of managerial myopia on information technology (IT) investment. Specifically, it aims to investigate the influence of chief information officer (CIO) compensation on IT investment and the moderating role of the board monitoring strength on this relationship.

The study examines a sample of 194 firms listed on US stock exchanges with a CIO position in 2019. The authors employ hierarchical regression analysis to test the hypothesis.

The results show that CIO compensation negatively influences IT investment. Further, even though vigilant board monitoring does not necessarily reduce such opportunistic behaviors, weak board monitoring creates an environment for such actions.

First, the cross-sectional data can limit the results' generalizability. Second, the sampling frame is not perfectly random as it consists of firms that have CIO compensation information in the ExecuComp for 2019. Third, we include only two measures of board monitoring strength.

Board of directors should wisely select compensation packages' components since equity incentives potentially exacerbate managerial myopia. Moreover, firms may regulate CIOs' investment behaviors through board-level IT governance.

This study is one of the few studies that utilize CIO sensitivity to measure CIO compensation. Moreover, by examining the factors affecting IT investment behavior, this study sheds light on CIO incentives' impact on IT investment behaviors. Finally, to the best of the authors' knowledge, this is the first study to investigate board monitoring's role in the relationship between CIO sensitivity and IT investment intensity.

The purpose of this paper is to examine the monitoring effectiveness of insider-dominated boards and outsider-dominated boards on different types of CEOs.

To test whether boards monitor inside CEOs and outside CEOs differently and to compare the sizes of the effects across board types, the paper relates CEO resignations to performance measure. The paper tests the hypotheses using logit models to estimate the probability of a CEO change.

It is widely believed that only an outsider-dominated board can provide effective management oversight. The paper finds evidence supporting this view after categorized CEOs based on their affiliation with their firms upon hire. However, the paper also documents that after the Sarbanes-Oxley Act of 2002 (SOX), an insider-dominated board is just as effective as an outsider board in monitoring if the CEO was initially hired from outside of the firm. This suggests that there is no difference between insider and outsider board monitoring of outside CEOs. Therefore, after SOX, as far as board monitoring is concerned, what matters is the independence between the CEO and the firm rather than the board structure itself.

If effective board monitoring is the reason of the revised listing standards approved by Securities and Exchange Commission (SEC) in 2003 to require companies listed on NYSE or Nasdaq to have a board that is composed of a majority of independent (or outsider) directors, the paper has provided more flexibility and choices to the listed firms. For example, firms that will be better off with insider boards can choose to hire outside CEOs because monitoring effects on outside CEOs are the same regardless of board types after SOX.

The results of this paper have interesting implication. First, the paper has shown that an outsider-dominated board is still a better monitor even after categorized CEOs based on their affiliation with their firms upon hire. Second, if effective board monitoring is the reason of the revised listing standards approved by SEC in 2003 to require companies listed on NYSE or Nasdaq to have a board that is composed of a majority of independent (or outsider) directors, the paper has provided more flexibility and choices to the listed firms. For example, firms that will be better off with insider boards can choose to hire outside CEOs because monitoring effects on outside CEOs are the same regardless of board types after SOX.