-
Journal menu
- General information
- Editorial Board and External Reviewers
- Journal Policies
- Publication Ethics and Malpractice Statement
- Instructions for authors
- Paper reviewing
- Article processing charge
- Feedback from stakeholders
- Journal’s Open Access statement
- Order hard copies of the journal
- 50 most cited papers in the journal
SUBSTITUTION EFFECTS OF INTERNAL GOVERNANCE MECHANISMS: EVIDENCE FROM SWITZERLAND
Download This Article
Sabina Nielsen 
, Simon Peck, Winfried Ruigrok
Abstract
This paper explores the substitution effects among three governance mechanisms, board monitoring potential, incentives and ownership structure, in a sample of 176 publicly listed companies in Switzerland, a country characterised by bank-centred governance system and high degree of ownership concentration. Our results suggest that whereas ownership concentration per se does not substitute for monitoring by the board, shareholdings held by board and top management and presence of a shareholder on the board act as substitutes for board independence. Moreover, we found that substitution effects differ with the identity of the largest shareholder. Firms owned by financial institutions exhibit a negative relationship between board independence and shareholder representation on board, whereas in family controlled firms board and managerial ownership is the main substitute for board monitoring.
Keywords: Governance Mechanisms, Ownership Structure, Director Independence, Incentives
How to cite this paper:Nielsen, S., Peck, S. I., Ruigrok, W. (2008). Substitution effects of internal governance mechanisms: evidence from Switzerland. Corporate Ownership & Control, 5(3-1), 212-219. https://doi.org/10.22495/cocv5i3c1p5
