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When does ownership matter? Board characteristics and behavior

Author

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  • Kurt A. Desender
  • Ruth V. Aguilera
  • Rafel Crespi
  • Miguel GarcÍa‐cestona

Abstract

We develop a contingency approach to explain how firm ownership influences the monitoring function of the board—measured as the magnitude of external audit fees contracted by the board—by extending agency theory to incorporate the resource dependence notion that boards have distinct incentives and abilities to monitor management. Analyses of data on Continental European companies reveal that while board independence and audit services are complementary when ownership is dispersed, this is not the case when ownership is concentrated—suggesting that ownership concentration and board composition become substitutes in terms of monitoring management. Additional analysis shows that the relationship between board composition and external audit fees is also contingent upon the type of the controlling shareholder. Copyright © 2013 John Wiley & Sons, Ltd.

Suggested Citation

  • Kurt A. Desender & Ruth V. Aguilera & Rafel Crespi & Miguel GarcÍa‐cestona, 2013. "When does ownership matter? Board characteristics and behavior," Strategic Management Journal, Wiley Blackwell, vol. 34(7), pages 823-842, July.
    • Handle: RePEc:bla:stratm:v:34:y:2013:i:7:p:823-842
    DOI: 10.1002/smj.2046
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    Cited by:

    1. Singh, Deeksha, 2025. "Corporate governance, board networks and firm performance," Journal of International Management, Elsevier, vol. 31(4).
    2. Kishk, Israa & Rao-Nicholson, Rekha, 2025. "Corporate ownership types and internationalization strategies: The moderating role of home country capitalism," International Business Review, Elsevier, vol. 34(6).
    3. Sunny Juan Hong & Oliver Marnet, 2025. "Outside board directors’ expertise and intellectual capital disclosure: evidence from FTSE 350 companies," International Journal of Disclosure and Governance, Palgrave Macmillan, vol. 22(4), pages 862-895, December.
    4. Liu, Yu & Peng, Mike W. & Wei, Zuobao & Xu, Jian & Xu, Lixin Colin, 2025. "Surviving and recovering in times of crisis: A resource dependence view of firm ownership," Journal of Business Research, Elsevier, vol. 199(C).
    5. Huizhong Lu & Zohaib Zahid & Jijian Zhang & Fakhar Shahzad & Furman Ali, 2025. "Is Innovation-Related Textual Information True? Insight from Equity Pledging Behavior in Chinese A-Share Listed Firms," Journal of the Knowledge Economy, Springer;Portland International Center for Management of Engineering and Technology (PICMET), vol. 16(4), pages 14644-14686, October.
    6. Kunst, Vincent E. & Beugelsdijk, Sjoerd, 2026. "The predictive power of agency theory in a multipolar world," International Business Review, Elsevier, vol. 35(1).

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