A Clash of Governance Logics: Foreign Ownership and Board Monitoring

Forthcoming in the Strategic Management Journal (published online Dec. 4, 2014)

42 Pages Posted: 21 Mar 2015

See all articles by Kurt A. Desender

Kurt A. Desender

Universidad Carlos III de Madrid

Ruth V. Aguilera

Northeastern University - Department of International Business and Strategy

Mónica LópezPuertas-Lamy

Universidad Carlos III de Madrid

Rafel Crespí-Cladera

Universitat Illes Balears (UIB), Dep. Economia i Empresa

Date Written: March 20, 2013

Abstract

We ask whether and when shareholder-oriented foreign owners are likely to change corporate governance logics in a stakeholder-oriented setting by introducing shareholder-oriented governance practices. We focus on board monitoring and claim that because the bundle of practices used in a stakeholder context does not protect shareholder-oriented foreign owners’ interests, they seek to introduce their own practices. Our results suggest that board monitoring is only activated when shareholder-oriented foreign ownership is high and that the influence of foreign ownership is especially strong in firms without large domestic owners, with high levels of risk and poor performance. Our findings uncover the possibility of the co-existence of different corporate governance logics within a given country, shaped by the nature and weight of foreign owners.

Keywords: Corporate Governance, Ownership, Board Monitoring, Board of Directors, Audit Fees

Suggested Citation

Desender, Kurt A. and Aguilera, Ruth V. and LópezPuertas-Lamy, Mónica and Crespi-Cladera, Rafel, A Clash of Governance Logics: Foreign Ownership and Board Monitoring (March 20, 2013). Forthcoming in the Strategic Management Journal (published online Dec. 4, 2014). Available at SSRN: https://ssrn.com/abstract=2581553

Kurt A. Desender (Contact Author)

Universidad Carlos III de Madrid ( email )

Calle de Madrid, 123
Getafe, 28903
Spain

Ruth V. Aguilera

Northeastern University - Department of International Business and Strategy ( email )

Boston, MA 02115
United States

Mónica LópezPuertas-Lamy

Universidad Carlos III de Madrid ( email )

CL. de Madrid 126
Madrid, Madrid 28903
Spain

Rafel Crespi-Cladera

Universitat Illes Balears (UIB), Dep. Economia i Empresa ( email )

Crta. de Valldemossa km 7, 5
07071 Palma Mallorca
Spain
+34 971 173273 (Phone)
+34 971 173426 (Fax)

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