The Effect of Strengthened Monitoring and Oversight Mechanisms on U.S. Firms Listed on NASDAQ

Agency theory and conventional wisdom suggest that strengthened monitoring oversight mechanisms are necessary to align the actions of management with interests shareholders, which should be maximize shareholder wealth. In 2003, legislators regulators corporate governance a series laws regulations in response number scandals late 1990s. The purpose this study is determine how affected performance U.S. companies listed NASDAQ. conjunction agency view wisdom, we expect reduce problems costs increase firm performance. We conducted sample 381 firms 5,005 firm-year observations from trading on NASDAQ over period 1997-2012. analyzed data using difference-in-difference methodology found most were not by 2003 changes rules. results consistent window-dressing suggests managers retained their influence board appointed directors who technically met new requirements but sympathetic management, giving impression made. Keywords: ; governance; performance; monitoring; oversight; NASDAQ; methodology; DOI: 10.7176/RJFA/12-16-02 Publication date: August 31 st 2021