4. The Director’s New Clothes (or, The Myth of Corporate Accountability)

Monks, Robert A. G.; Minow, Nell

doi:10.7312/chew14856-004

Cited by 84 publications

(99 citation statements)

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“…Monks and Minow (2004) suggest that since larger boards are able to commit more time and effort to overseeing management, board monitoring can improve the quality of managerial decision-making and lead to better firm performance. Adams and Mehran (2003) By contrast, Lipton and Lorsch (1992) and Jensen (1993) theoretically argue that larger boards are less effective in group decision-making and strategy formulation, and contribute to the entrenchment of CEOs.…”

Section: Board Sizementioning

confidence: 99%

Managerial ownership, corporate governance and firms' exporting decisions: evidence from Chinese listed companies

Dixon

Guariglia

Vijayakumaran

2015

The European Journal of Finance

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Section: Board Sizementioning

confidence: 99%

Managerial ownership, corporate governance and firms' exporting decisions: evidence from Chinese listed companies

Dixon

Guariglia

Vijayakumaran

2015

The European Journal of Finance

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“…Importantly, the significance of creating a sound legislative framework before considering the set-up of a particular financial system (bankbased or market-based) is according to some scholars (e.g. Monks and Minow, 2001, Levine, 2002, Kaufmann et al, 2000 essential at the early stages of a country's financial system development. Countries with good investor protection laws, competition laws and proper disclosure of information have financial systems represented by larger and broader financial markets which means better accessibility to external finance for individual firms (La Porta et al, 1997, Pagano andVolpin, 2005).…”

Section: The Role Of Institutions In Financial System Developmentmentioning

confidence: 99%

“…The studies of Klapper and Love (2004) and Francis et al (2005) find that the quality of corporate governance is positively related to growth opportunities of firms and their need for external financing. Simply put, governance provides assurance that the market is honest, that investors make decisions based on reliable information and that management is running the enterprise for the stakeholders' benefit (Monks and Minow, 2001). Committing to better corporate practices might not be easy in less developed economies and in countries with poor state investor protection as the mechanisms to do so might not be present or are too expensive (Doidge et al, 2007).…”

Section: The Role Of Institutions In Financial System Developmentmentioning

confidence: 99%

Financial System and Equity Culture Development in Central and Eastern European Countries: The Effect of Institutional Environment

Stone¹,

Filippaios²,

Stoian³

2012

Handbook of Institutional Approaches to International Business

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This paper serves as a conceptual discussion of equity culture and its development mechanism. Equity culture is a less popular source of finance in the Central and Eastern European Countries (CEECs) but yet developed in a number of developed economies. The way the CEECs will proceed is a dynamic and challenging issue to observe. We graphically display ten CEECs from our research sample and four benchmarks in terms of their institutional characteristics and thus cumulatively, we portray the status of their financial system developments and equity culture creation. The Co-Plot applied to create the exhibits, enable us firstly, to identify indicators leading to debt financing and equity financing; and secondly, to place individual CEECs not only in terms of their general financial system development credibility but also in relation to equity culture development. The presence of an efficient bureaucratic system and an institutional system with low corruption levels is a necessary condition. Therefore, if a country's government aims to start building equity culture at all levels of its corporate sector, improved quality of the bureaucratic system and low levels of corruption may enable them to achieve this.

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“…Yet, boards are being criticized for failing to meet their governance responsibilities. Major institutional investors put pressure on (incompetent) directors and have long advocated changes in the board structure (Monks and Minow, 2001). Their call has been strengthened by many corporate governance reforms resulting from major corporate failures.…”

Section: Introductionmentioning

confidence: 99%

Identifying Key Determinants of Effective Boards of Directors

Levrau¹,

Berghe

2009

Global Boards

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Mainstream research on boards of directors has been focusing on a direct relationship between board characteristics and firm performance, but up till now the results are inconclusive. Although these studies revealed interesting and useful insights, little is known about the factors that shape board effectiveness. This paper aims to reduce this gap by exploring the variety of indicators that contribute to the effectiveness of boards. The paper derives from an interview-based investigation among 104 directors of Belgian listed companies. The findings are further elaborated with quantitative data from two written questionnaires, involving directors of non-listed companies and experts in the field of corporate governance. The results point to three major issues. First, there appears to be a gap between a limited number of structural board measures consistently found in literature and the systematic occurrence of a set of behavioural criteria of board effectiveness in the perceptions of (Belgian) directors. Second, the findings suggest that the value of independence may be overemphasized at the cost of the broader issue of diversity. Third, it appears that mainstream board research ignores to a large extent two additional conditions (the information flow and the leadership style of the chairman) under which a board of directors can make an effective contribution to the strategic direction and control of a company. Our findings suggest that the ambiguity found in current research evidence can to some extent be attributed to the ignorance of a wide range of interconnected structural (such as diversity and competence) and behavioural factors (such as trust, attitude, norms and conduct) which actually shape the effectiveness of boards in performing their roles. 5 INTRODUCTIONBoards of directors are of interest to academics, the investment community, the business world and society at large. According to Cadbury (1999) this attention is understandable, given the fact that boards of directors serve as a bridge between the shareholders, who provide capital, and management in charge of running the company. At the heart of the corporate governance debate is the view that the board of directors is the guardian of shareholders' interest (Dalton et.al., 1998). Yet, boards are being criticized for failing to meet their governance responsibilities. Major institutional investors put pressure on (incompetent) directors and have long advocated changes in the board structure (Monks and Minow, 2001). Their call has been strengthened by many corporate governance reforms resulting from major corporate failures. The reforms put great emphasis on formal issues such as board independence, board leadership structure, board size and committees (Weil, Gotshal and Manges, 2002;Van den Berghe and De Ridder, 1999). These structural measures are assumed to be important means to enhance the power of the board, protect shareholders' interest, and hence, increase shareholder wealth (Becht et.al., 2002;Westphal, 1998).The interest of the invest...

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4. The Director’s New Clothes (or, The Myth of Corporate Accountability)

Cited by 84 publications

References 0 publications

Managerial ownership, corporate governance and firms' exporting decisions: evidence from Chinese listed companies

Managerial ownership, corporate governance and firms' exporting decisions: evidence from Chinese listed companies

Financial System and Equity Culture Development in Central and Eastern European Countries: The Effect of Institutional Environment

Identifying Key Determinants of Effective Boards of Directors

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