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Manuscript Type: EmpiricalResearch Question/Issue: We propose that high levels of monitoring are not always in the best interests of minority shareholders. In family-owned companies the optimal level of board monitoring required by minority shareholders is expected to be lower than that of other companies. This is because the relative benefits and costs of monitoring are different in family-owned companies. Research Findings/Insights: At moderate levels of board monitoring, we find concave relationships between board monitoring variables and firm performance for family-owned companies but not for other companies. The optimal level of board monitoring for our sample of Asian family-owned companies equates to board independence of 38 per cent, separation of the chairman and CEO positions, and establishment of audit and remuneration committees. Additional testing shows that the optimal level of board monitoring is sensitive to the magnitude of the agency conflict between the family group and minority shareholders and the presence of substitute monitoring. Theoretical/Academic Implications: This study shows that the effect of additional monitoring on agency costs and firm performance differs across firms with different ownership structures. Practitioner/Policy Implications: For policymakers, the results show that more monitoring is not always in the best interests of minority shareholders. Therefore, it may be inappropriate for regulators to advise all companies to follow the same set of corporate governance guidelines. However, our results also indicate that the board governance practices of family-owned companies are still well below the identified optimal levels.

This study investigates whether busy CEOs are associated with lower firm performance, and if this relationship is moderated by firm growth, CEO tenure and corporate governance practices in Indonesia. This study uses 876 firms-year observations from 268 firms listed on the Indonesia Stock Exchange (IDX) for the period spanning 2014 to 2017. We find that busy CEOs are associated with lower firm performance. This negative relationship is stronger in firms with high growth and when busy CEOs have shorter tenure. We also show that corporate governance practices have no impact on the negative relationship between CEO busyness and firm performance. For firms and shareholders, our findings indicate that it is not a good idea for CEOs to hold two or more outside directorships, particularly in the early years of taking up their CEO position. Our results suggest that restrictions on CEO busyness would be beneficial to shareholders.

This study examines how the research and development (R&D) investments of listed companies in Indonesia are influenced by the educational characteristics of their CEOs and CFOs. This study uses 368 observations from 150 listed companies on the Indonesian Stock Exchange for the period 2010 to 2015. We find that CEOs with higher educational levels invest more in research and development. This is consistent with more education instilling a longer-term perspective on corporate managers. We also find that CFOs with accounting certifications invest less in R&D, consistent with the risk-adverse nature of the accounting profession. For companies and shareholders, our findings indicate the need for a greater understanding of the factors associated with R&D investments in Indonesia and other developing markets. Particularly, factors related to the background experience of CEOs and other executives, whose characteristics can have a real impact on the R&D investment decisions of firms. Our results show that the education of CEOs and CFOs is associated with their investment decisions in research and development. Thus, different education backgrounds create a bias for or against R&D investment in Indonesian firms.