Abstract
AbstractA good monitoring that reduces agency conflicts can help in developing structured policies in code of ethics to help the social information processing for employees. The objective of this research is to investigate whether the corporate governance characteristics, such as duality, board of directors' size and independence as measures of monitor capacity are related to workers' communication policies disclosed in code of ethics. Based on a content analysis of code of ethics to define the latter polices and on regression analyses on 808 firm‐year observations, our results show that board of directors' independence is positively related to code of ethics policies related to communication with employees. Independence of the board is expression of supervising, supporting transparency and aiming to safeguard the best interests of all stakeholders, including employees.
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