Agency Assurance - Universität St.Gallen

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4.5.4 Ethical Values of the Audit Committee 76
4.5.5 Audit Committee and Board Size 76
4.5.6 Audit Committee and Board Independence 79
4.6 Strengthening the Audit Committee 82
5 Constitution – The Rights of the Audit Committee 85
5.1 Expectations for the Audit Committee in the Corporate Governance
System
85
5.2 The Right of Best Efforts from the Agents of Corporate Governance 86
5.3 Pressures Against Monitoring 88
5.3.1 Discipline is Lacking 88
5.3.2 Internal Finance Management as the Buddy, not the Bully 88
5.3.3 Excessive Executive Compensation Elevates the Transparency
Barrier
94
5.3.4 External Auditors and the Recurring Expectations Gap 104
5.4 Leading and Supporting Monitoring and Bonding Activities 109
5.5 Audit Committee Performance Evaluation 110
6 Constitution – The Imperfect Authority of Institutional Investors 113
6.1 Institutional Ownership and Majority Control 113
6.1.1 Investor Anonymity in Agency Theory 113
6.1.2 Institutional Fund Managers – an Apparent Agency Remedy 113
6.1.3 Involved and Informed (Active) Investors 114
6.1.4 Individual Shareholder and Institution Separation 116
6.1.5 Conflicts of Interest and Activism 119
6.1.6 Supervision Effectiveness 127