Purpose In this study, the authors aim to explore whether the financial sector differs from the non-financial sectors in terms of board monitoring and advising. Design/methodology/approach For the empirical investigation, the study is built on a wide range of cross-sectoral and international sample for the period 2002–2021. A generalized linear mixed model and a linear mixed model are used. Findings In line with the study’s expectations, the authors find that the financial sector has stronger board monitoring ability, as ensured by less CEO duality but more non-executive, independent and female directors on board. On the other hand, the financial sector has weaker board advising ability, which is characterised by having fewer foreign and expert directors on board. In terms of affiliated and tenured directors, the authors could not detect any significant difference between the financial and non-financial sectors. Practical implications The study offers valuable insights for managers and policymakers. For managers, it underscores the importance of tailoring board composition to sector-specific needs, emphasising the trade-offs between monitoring and advising. For policymakers, the findings highlight the need for regulatory frameworks that encourage diversity and independence in the financial sector which has implications for policymaking of the financial sector as well as corporate governance code formulation. Originality/value The study advances our understanding of how sector-specific characteristics influence board composition. Secondly, this study contributes to the literature by focusing on a comprehensive, cross-sectoral and international dataset. Lastly, it is unique in focusing on the financial versus non-financial sectors’ wide range of board characteristics.
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Rim Boussaada
Ali Uyar
Ahmed Bani-Mustafa
International Journal of Accounting and Information Management
Winthrop University
Excelia Business School
Australian University, Kuwait
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Boussaada et al. (Thu,) studied this question.
www.synapsesocial.com/papers/69e320af40886becb653fcba — DOI: https://doi.org/10.1108/ijaim-05-2025-0153