This study investigates the determinants of the compensation of the members of the board of statutory auditors, an independent governance oversight institution typical of the Italian board structure. By adopting an agency theory framework, which takes into account both optimal contracting and managerial power perspectives, we find that statutory auditors’ compensation is mainly based on the observable effort they exert and their responsibilities. However, our findings also show that statutory auditors with a stronger involvement with the firm and its controlling shareholder receive significant additional compensation for services that are non-related to their role. From a theoretical perspective our findings provide new insights that optimal contracting and managerial power perspectives do not necessarily represent competing explanations, rather they are complementary views on a continuum of types of contracting arrangements that can be encompassed within agency theory. This study also offers insights to policymakers by questioning the current regulation that allows threats to the independence of the members of a formally independent oversight governance body.
Key-Words: governance e controlli interni