Corporate Governance Monitoring, Decision Making, Reporting and Disclosures, and the Effect of Technological Tools: The case of Corporate Boards of Directors and Pension Scheme Boards

Abstract

This thesis uses agency theory and highlights research gaps regarding how big data analytics (BDA) and technological tools can enhance governance, particularly in directors' monitoring and decision-making in corporate boards (BoDs). I conducted 40 semi-structured interviews focusing on corporate boards and explored the potential effects of BDA and technological tools on monitoring, disclosures, and reporting. Technological tools are a variable previously overlooked in agency theorisation, which is why I wanted to understand the perceptions of participants on whether such tools are used and their potential effect on some key governance functions of the BoDs. The findings underscore the pivotal role of technological tools in mitigating agency costs through enhanced monitoring mechanisms. Allowing the BoDs access to real-time and high-volume data, these technologies effectively reduce information asymmetries that affect oversight functions. However, findings also reveal that too much data can lead to the BoDs ‘’drowning’’ in data. A key theoretical implication is that the direct transmission of critical information to BoDs, bypassing managerial intermediation, can substantially lower agency risk. This advancement holds significant promise for enhancing organisational transparency and improving the quality of reporting and disclosure processes.
To complement the general enquiry on whether and/or how BDA and technological tools can improve some key governance functions, I completed a second study, a case study on pension fund governance, where 18 participants were interviewed. I explored whether BDA and technological tools are used, and my participants’ views on whether such tools can affect the monitoring and decision-making functions of trustees. I delved deeper to examine whether information asymmetries can be affected by the use of technological tools. Findings from this study indicate that these technologies can help alleviate traditional agency problems, such as the informational advantage typically held by agents over principals. Artificial intelligence provides new insights and abilities that question and refine key assumptions of agency theory. Furthermore, the study reveals significant variation in trustee behaviour, challenging the conventional view that trustees uniformly act as principals and highlighting the nuanced and diverse nature of their governance roles and engagement.