Advisory directors,monitoring directors and board governance effectiveness
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    Abstract:

    Based on current job positions,job experiences and job knowledge,the research divides the directors into advisory directors and monitoring directors,and tests the effects of advisory and monitoring directors on board effectiveness in a sample of 1868 A-share stock market firms in China.The results suggest: the number of advisory directors is positively and significantly associated with board advising performance; the relationship between advising directors and advising effectiveness is positively moderated by the directors’firm-specific knowledge,firm’s advising needs and the CEO’s willingness to accept strategic advising from directors.Moreover,advisory directors may not diminish the effectiveness of board monitoring.Further,monitoring is associated with better board monitoring performances but weaker advising.Findings have important implications for both theory and practice regarding how to enhance board governance effectiveness.

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  • Online: April 16,2018
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