The monitoring role of insiders

• 成果类型: Article
• 署名作者: Drymiotes, George
• 署名单位: University of Houston System; University of Houston
• 刊物名称: JOURNAL OF ACCOUNTING & ECONOMICS
• ISSN/ISSBN: 0165-4101
• DOI: 10.1016/j.jacceco.2007.04.003
• 发表日期: 2007
• 关键词: board; determinants; COMMITTEE; DIRECTORS

摘要

Conventional wisdom suggests that giving monitored agents an oversight role may blunt the effectiveness of the monitoring process. In contrast, I show that less independent boards can sometimes be more effective at monitoring. Fully independent boards have incentives to shirk monitoring ex post, after the agents' productive inputs are sunk, if the boards cannot commit ex ante to monitoring. However, boards with inside directors may have incentives to monitor the agents ex post. The demand for insiders thus arises endogenously as they allow boards to indirectly commit to monitoring and thereby facilitate the monitoring process. (C) 2007 Elsevier B.V. All rights reserved.