An Empirical Examination of Stakeholder Groups as Monitoring Sources in Corporate Governance |
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| Authors: | Cassandra R. Cole Enya He Kathleen A. McCullough Anastasia Semykina David W. Sommer |
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| Affiliation: | 1. Cassandra R. Cole is an Associate Professor and Waters Fellow in Risk Management and Insurance at the College of Business, Florida State University.;2. Enya He is an Assistant Professor at the College of Business, University of North Texas.;3. Kathleen A. McCullough is an Associate Professor and State Farm Insurance Professor in Risk Management/Insurance at the College of Business, Florida State University.;4. Anastasia Semykina is an Assistant Professor in the Department of Economics, Florida State University.;5. David W. Sommer is a Professor and Charles E. Cheever Chair of Risk Management at Bill Greehey School of Business, St. Mary's University. Kathleen McCullough can be contacted via e‐mail: kmccullough@cob.fsu.edu. |
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| Abstract: | Insurers are formally and informally monitored by a variety of stakeholders, including reinsurers, agents, outside board members, and regulators. While other studies have generally examined these stakeholders separately, they have not accounted for the fact that there is some relation among the stakeholder groups, and the presence of these groups is likely to be jointly determined. By empirically controlling for these potential interrelations, we create a more complete assessment of the impact of these stakeholders/monitors on insurers’ risk taking. Specifically, we find that the presence of some stakeholders offsets the degree or presence of others, and that most stakeholders/monitors are associated with a reduction of overall firm risk. |
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