AbstractDivergent views exist about the impact of equity-based compensation on monitoring by Non-Executive Directors (NEDs) Prior studies report conflicting results mainly because of the endogeneity problem, which were not addressed or addressed using ineffective techniques. This study attempts...

This paper examines one type of failure in the governance system, the case where directors do not protect shareholders from securities fraud. We study the breakdown of the agency relationship in which shareholders not only sue the company, but also name the directors. We find that naming...