Please use this identifier to cite or link to this item: http://hdl.handle.net/10397/34226
Title: Managerial ownership, board monitoring and firm performance in a family-concentrated corporate environment
Authors: Cheng, P
Su, L 
Zhu, X
Keywords: Board of directors
Family concentration
Firm performance
Managerial compensation
Managerial ownership
Issue Date: 2012
Publisher: Wiley-Blackwell
Source: Accounting and finance, 2012, v. 52, no. 4, p. 1061-1081 How to cite?
Journal: Accounting and finance 
Abstract: Using data from Hong Kong, a market that has family-concentrated ownership structure, we examine the relation between managerial ownership, the board of directors and firm performance. We first conduct analysis on the managerial ownership and firm performance to derive the turning points where either 'convergence of interest' or 'entrenchment' effect of managerial ownership is dominant. Based on these estimated turning points, we find that at low and high level of ownership, effective board mitigates the entrenchment effect associated with managerial ownership; at medium level of ownership, board effectiveness is less demanded. These findings suggest that managerial ownership and board monitoring are substitutes in mitigating the agency problem between managers and shareholders. We also find that effective board curbs the excessive compensation by entrenched managers to themselves at low level of managerial ownership.
URI: http://hdl.handle.net/10397/34226
ISSN: 0810-5391
EISSN: 1467-629X
DOI: 10.1111/j.1467-629X.2011.00448.x
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