When does ownership matter? Board characteristics and behavior

Kurt A. Desender, Ruth V. Aguilera, Rafel Crespi, Miguel García-Cestona

Research output: Indexed journal article Articlepeer-review

201 Citations (Scopus)


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.

Original languageEnglish
Pages (from-to)823-842
Number of pages20
JournalStrategic Management Journal
Issue number7
Publication statusPublished - Jul 2013


  • audit
  • board of directors
  • corporate governance
  • monitoring
  • ownership structure


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