The wave of corporate scandals
has renewed concerns about the effectiveness of board monitoring
and the high compensations that directors’ receive.
Finally, our examination of whether institutional investors’
presence on boards of different types of institutions, such
as banks or investment funds, leads to observable differences
in remuneration policy can provide new insights on
the heterogeneity in monitoring costs across institutional
investors, which, in turn, has important implications for the
debate over the proper degree of institutional involvement
in corporate governance.