Artificial Intelligence (AI) is making significant progress in recent times and is gaining a strong foothold in business. Currently, there is no generally accepted scholarly framework for the governance of AI-based information technologies within corporate environments. Boards of directors who have the responsibility of overseeing corporate operations need to know how best to govern AI technologies within their companies. In response, this dissertation aims to understand the key elements that can assist boards in the governance of AI-based information technologies. Further, it attempts to understand how AI governance elements dynamically interact within a holistic system. As AI governance is a novel phenomenon, an exploratory investigation was conducted via a qualitative approach. Specifically, the study adopted a grounded theory methodology, within the constructivist paradigm, with the intent of generating theory instead of validating existing theory. Data collection included in-depth interviews with key experts in AI research, development, management, and governance processes in corporate and academic settings. Data were further supplemented with data received from conference presentations given by AI experts. Findings from this dissertation elicited a theoretical model of AI governance that shows various AI governance areas and constituting elements, their dynamic interaction, as well as the impact of these elements in enhancing the organizational performance of AI-based projects and reducing the risks associated with those projects. This dissertation provides a scholarly contribution by comparing governance elements within the IT governance domain and the new AI governance domain. In addition to theoretical contributions, this study provides practical contributions for the benefit of the boards of directors. These include a holistic AI governance framework that pictorially represents twenty-two AI governance elements that boards can use to build their own custom AI governance frameworks. In addition, recommendations are provided to assist boards in starting or enhancing their AI governance journeys. / Thesis / Doctor of Philosophy (PhD) / Artificial Intelligence (AI) refers to a set of technologies that seek to perform cognitive functions associated with human minds, such as learning, planning, and problem-solving. AI brings abundant opportunities as well as substantial risks. Major companies are trying to figure out how best to benefit from AI technologies. Boards of directors, with the responsibility of overseeing company operations, need to know how best to govern such technologies. In response, this study was conducted to uncover key AI governance elements that can assist boards in the governance of AI. Data were collected through in-depth interviews with AI experts and by attending AI conference presentations. Findings yield a theoretical model of AI governance that can assist scholars in enhancing their understanding of this emerging governance area. Findings also provide a holistic framework of AI governance that boards can use as a practical tool to enhance their effectiveness of the AI governance process.

Corporate governance's main purpose is to ensure that companies act in a way that is beneficial for their shareholders. This study presents skin in the game as a possible solution and investigates its impact on firm performance on the Swedish market. More precisely, the board of directors’ amount of skin in the game in the companies they manage and its impact on return on assets (ROA). Data of board composition and stock ownership are, among other variables related to the board of directors, used in a multiple regression to determine possible relationships with firm performance. Swedish corporate governance tradition advocates a clear separation of ownership and control. Despite this, a positive relationship between skin in the game and firm performance in Swedish companies is confirmed. ​​The conclusion of the study is that a board of directors with skin in the game increases firm performance.

The initial public offering (IPO) of a company is characterized by uncertainty, and a large body of research has focused primarily on underpricing. This study takes a different approach by examining the changes and composition of the board of directors in IPO companies and the effect on market valuation measured by the market-to-book ratio. A company's preparation for the IPO is argued to be made with value maximization features, and it is therefore interesting to see if the market assesses specific changes and the characteristics of the board of directors on the first day of trading. This study takes a starting point in agency theory, signaling theory, and the role of the board of directors in a company to protect and maximize shareholder value, in order to examine the effect on firm value. The sample consisted of 204 IPOs between 2018 and 2021 on Nasdaq Stockholm and First North Growth Market. The study has used multiple OLS regression models to examine the relationship between the board of directors' composition, characteristics, and market-to-book ratio. The findings suggest that an increase in the proportion of directors that have been subject to change two years or less before the IPO is negatively related to market valuation.

In my first essay, I find a statistically and economically significant director-specific component in CEO pay following the enactment of the Sarbanes-Oxley Act of 2002 (SOX). In the cross-section of firms, directors that award relatively higher (lower) CEO pay in one firm also award relatively higher (lower) CEO pay in other firms of whose boards they are members during the year. Based on my estimates, the director-specific component is responsible for around ±3.5% of total CEO pay or around ±$230,000 per CEO-year on average. In addition to affecting CEO pay levels, the director-specific component also has a significant effect on the changes and the composition of CEO pay, thus affecting CEO incentives. I pursue two potential explanations for our findings—changes in board composition and changes in director behavior after SOX. I do not find evidence that the director-specific component in CEO pay is due to changes in board composition. Instead, I find evidence that the director-specific component in CEO pay is due to changes in director behavior related to the additional risks and employment concerns imposed on directors after SOX. My findings are consistent with the view that SOX discourages directors from taking risks when awarding CEO pay and so directors award CEO pay that they can more easily justify through direct experiences in other firms. These findings have wide implications about the importance of directors in setting CEO pay, the existence of agency problems within the board, and the consequences of regulation in general and SOX in particular. My second essay concerns the compensation of directors themselves. I find that institutional ownership is positively related to the level of director compensation and the proportion of equity based compensation that directors receive. These results are consistent with the interpretation that institutions prefer stronger links between firm performance and board compensation and are willing to pay higher levels of compensation for better governance. I also investigate the difference between the effects of active versus passive institutional investment and find that active institutions appear to have a larger economic impact on director compensation. However, I do not find a statistical difference between the effects of active and passive ownership. My third essay studies the strategies that firms follow when apportioning incentive compensation within the board of directors. Firms tend to preserve the structure of director incentives over time so that firms using equal (variable) incentives in one year are more likely to use equal (variable) incentives in the following year. I further examine whether the structure of director incentives within the board affects acquirer performance in corporate acquisitions. I find that the five-day announcement returns of firms awarding equal director incentives are around 1% higher than the returns of firms that award variable director incentives within the board. These results are robust to standard controls related to acquirer returns, to different lengths of the announcement window, and to alternative incentive strategy classification schemes. Overall, my findings are consistent with the idea that director incentives play a significant role in corporate performance and with the idea that equal director incentives dominate variable incentives in circumstances where the success of the outcome is likely to depend on the board as a whole.

This dissertation consists of three studies related to corporate governance of equity mutual funds in a framework of relations between the three closely interrelated actors of mutual fund industry. The mutual fund advisers, the shareholders and the mutual fund board being the advocate of shareholders rights. The first study analyzes the advisory fee, using a survivorship bias free data set of 176 equity funds managed by 125 different advisers. The price of professional portfolio management provided by the mutual fund adviser depends not only on the fund characteristics but also on the fund objective, the adviser's portfolio related and management based decisions, and the portfolio performance. I find that the advisers may reduce their own costs through the use of derivatives or manipulate the actual fee contract by engaging in soft dollar agreements. Advisers actively manage the advisory fee contracts responding to the outcome of their management decisions. The advisory fee increases after voluntary fee reimbursement or if the adviser is not fully reimbursed for certain services. Risk taking behavior is the main motivation behind the structure of advisory contracts. Also, I show that non-surviving funds have higher advisory fees, suggesting competitive fee pricing may be necessary for survival. The second study focuses on the relation between general board characteristics, independent director characteristics and the advisory fee which is solely an outcome of the negotiations between the fund board and the adviser, thus a good proxy for the governance skills of the board. I also examine the impact of SEC's regulation change of 2000. Mutual fund scandals that took place after the regulation change of 2000 suggested that besides the fraction of independent seats, the individual characteristics of the members that occupy board seats are crucial for mutual fund board governance. I find that boards benchmark objective average fee but not necessarily for the best interest of shareholders. Shareholders are likely to benefit from the expertise of members with higher tenure and finance backgrounds. Although increase in board independence is likely to contribute to board governance, the effect of 2000 regulation change of board independence on its arguably target group is limited. Nominating committee improves the board governance. Although the results do not suggest that an independent chairman directly improves board governance, I find modest evidence that the impact of an independent chairman is likely to depend on the expertise of the member that would occupy the chairman seat. Third study analyzes a specific tool, soft dollar arrangements using a survivorship bias free data set of 432 equity funds managed by 129 different advisers. Soft dollar arrangements affect all three actors of mutual fund industry. They are widely used by the advisers, have to be monitored closely by the fund board and eventually affect the overall wealth of shareholders. Fund advisers determine the broker base, scope of brokerage services and whether to self produce or outsource brokerage services through soft dollar arrangements. In return, shareholders expect to benefit from better fund performance and reduction in advisory fee. I find that transaction execution not necessarily motivated by additional brokerage services is likely to be responsible for high turnover. Construction of brokerage base by the adviser is not arbitrary. Advisers ex ante construct the broker base in order to minimize the brokerage commissions and considering ex post soft dollar arrangements. Transaction execution related services lead to less brokerage commissions and soft dollar use while both increase if research is a consideration for broker participation. More concentrated broker base leads to lower brokerage fee and higher soft dollar use. Results indicate that advisers enforce competition within brokerage industry for lower cost of transaction execution. Shareholders benefit from increasing soft dollar use through performance improvement and reduction in advisory fee. Yet, the cost of soft dollar arrangements seems to exceed their benefit to shareholders. If the results indicate competition within brokerage industry for lower cost of transaction execution, the undisclosed premium paid for the additional services are likely to be responsible for this adverse effect.

This study investigates sustainability performance of Swedish firms through the lens of the upper echelons theory. We test how the size, average age, and proportion of gender in boards of directors (BoDs) and top management teams (TMTs), is related to sustainability performance. While BoDs have been studied in this way several times previously, no other studies, which we are aware of, study the relationship between TMTs and sustainability performance. The study follows a purely quantitative approach and is based on large and mid cap firms on the Nasdaq Stockholm exchange. The sustainability performance of firms is proxied by the ESG-score issued by Refinitiv. The study finds that the size of both BoDs and TMTs is positively and significantly related to sustainability performance. The relationship for the size of BoDs is particularly strong and significant, whereas the one for TMTs is less so. Regarding the proportion of gender, this variable was also positively and significantly related to sustainability performance, but only for BoDs. Finally, the age variable was insignificant for both BoDs and TMTs.

This paper investigates the relationship between board gender diversity and financial performance. Previous work in this area has focused on providing evidence for a direct link between the two factors, which has resulted in mixed, inconclusive evidence. This study includes corporate social responsibility as a moderating influence on this relationship. The dataset consists of 5,077 firm-year observations with 839 firms present. The study was done with data from six emerging markets as identified by S&P Dow Jones Global Equity Index Series. The results indicate a positive interaction between board gender diversity and a firm’s corporate social responsibility engagement and a strong positive association between corporate social responsibility engagement and financial performance.

Syfte: Intresset för miljö och processen kring miljöprestanda har blivit alltmer intensiv hos forskare, investerare och andra intressenter och därför har relevansen av miljöprestanda blivit alltmer viktig. Syfte med studien är därför att analysera inverkan av längden på styrelseuppdrag (BoD) och revisionskommitténs uppdrag (AC) på miljöprestanda (EP) år 2021 i EU och USA. Vi ska undersöka om styrelseledamöternas rotation genererar högre miljöprestanda. Vi ska titta på det genomsnittliga antalet år som nuvarande styrelse- och revisionskommitté har tjänstgjort i en organisation.  Metod: Studien bygger på en positivistisk forskningsfilosofi och en hypotetisk-deduktiv ansats antas. En tvärsnittsdesign och en kvantitativ forskningsstrategi har antagits för att genomföra studien med data för 1143 företag i EU och 3131 företag i USA. Studiens data är sekundär och inhämtad från databasen Refinitiv Eikon och har därefter analyserats i statistikprogrammet SPSS.  Resultat och slutsats: Utifrån studiens resultat finner vi inget stöd för våra hypoteser gällande ett positivt samband mellan längden på styrelseuppdrag och miljöprestanda, ett positivt samband mellan längden på revisionskommitténs uppdrag och miljöprestanda och en negativ interaktionseffekt mellan variablerna och miljöprestanda i EU men däremot finner vi stöd för våra hypoteser i USA. Längre styrelse-och revisionsuppdrag leder till högre miljöprestanda i företag och detta går i linje med legitimitetsteorin där erfarenhet och kunskap skapar mer legitimitet för företaget. Däremot, om styrelsen och revisionskommittén har samma position i en organisation samtidigt leder det till en “kollisionsväg” mellan dessa.  Examensarbete bidrag: Studien bidrar till att fylla forskningsgapet genom att studera år 2021 samt bidrar den med en jämförelse mellan EU och USA som ska skapa en större förståelse och förklara styrningsmekanismer som förklarar beteenden som finns i en organisation.  Förslag till fortsatt forskning: Eftersom studie inom detta forskningsområde är unik och forskning inom icke-finansiella frågor är begränsad i detta sammanhang finns det stora möjligheter för forskare att utveckla den. Ett förslag till vidare forskning är att studera denna hypotesprövning under flera år för att få en mer representativ bild över en längre tid fast med en annan metod. / Aim: Interest in the environment and the process of environmental performance has become increasingly intense among researchers, investors and other stakeholders and therefore the relevance of environmental performance has become increasingly important. The purpose of the study is therefore to analyze the impact of the length of board of directors (BoD) tenure and audit committee (AC) tenure on environmental performance (EP) in 2021 in the EU and the USA. We will investigate whether the rotation of board members generates higher environmental performance. We will look at the average number of years the current board and audit committee have served in an organization. Method: The study is based on a positivist research philosophy and a hypothetical-deductive approach is adopted. A cross-sectional design and a quantitative research approach have been adopted to conduct the study with data for 1143 companies in the EU and 3131 companies in the US. The study's data is secondary and obtained from the Refinitiv Eikon Database and has subsequently been analyzed in the statistical program SPSS. Result and conclusions: Based on the results of the study, we find no support for our hypotheses regarding a positive relationship between the length of board tenure and environmental performance, a positive relationship between the length of audit committee tenure and environmental performance and a negative interaction effect between the variables and environmental performance in the EU, but we do find support for our hypotheses in the United States. Longer board tenure and audit committee tenure lead to higher environmental performance in companies and this is in line with the legitimacy theory where experience and knowledge create more legitimacy for the company. On the other hand, if the board and the audit committee have the same position in an organization at the same time, it leads to a "collision course" between them Contribution of this thesis: The study contributes to filling the research gap by studying the year 2021 and it contributes with a comparison between the EU and the USA that should create a greater understanding and explain governance mechanisms that explain behaviors found in an organization. Suggestions for future research: As the study in this research area is unique and research in non-financial matters is limited in this context, there are great opportunities for researchers to develop it. A suggestion for further research is to study this hypothesis test over several years to get a more representative picture over a longer period of time but with a different method.

The past several years the environmental pressure on companies have increased. Both regarding their impact on the external environment, and on the internal environment. The question of gender diversity in the workplace has been a hot topic for decades. Women have historically always been underrepresented in the boardroom, with men traditionally assuming high governing positions. As more women have assumed a place on the board of directors, factors such as the transparency has increased. Raising the question on whether the increased number of women within decision-making position shas something to do with achieving higher ESG scores.  The purpose of the study is to investigate if there is a relationship between the proportion of women on the board of directors and the ESG scores of listed companies in Europe. Moreover, also study whether the critical ratio of three or more women on the board have any significant effect on the score. The companies included in the study has had at least one ESG score between 2018 – 2022. Four research questions lay ground for four hypotheses, each intended to investigate the relationship between ESG and women on the board of directors.  What was found was a highly significant relationship between the % of women on the board of directors and the ESG score. Breaking it down, all three pillars are highly affected by the ratio of women. The most affected, however, is the governance pillar due to the relationship with board diversity, and transparency towards investors and other stakeholders. These results are supported by previous studies studying the same phenomenon. A significant relationship was also found between the % of women and the ESGC score, meaning the ESG score including possible controversies the company is, or has been, involved in. The difference in effect between the effect on ESG- and ESGC score is not significant, however. Meaning there is nothing saying that women have an increased effect on keeping companies out of scandals involving ESG factors. Moreover, the critical ratio theory is supported by this study. With companies with three or more women on their board of directors scoring significantly higher ESG score than those without.  A conclusion of this study is hence that having more women on the board of directors can increase the work towards ESG matters, and thus also the ESG score due to several different reasons. This further supports the inclusion of gender quotas within companies and institutions.

The Internet Corporation for Assigned Names and Numbers (ICANN) is the organization that provides the technical support for the Internet. ICANN is a nonprofit organization based in California and is under contract to the United States Department of Commerce. It has come under attack from many sides because it is contracted through the U.S. government and it is a private entity. One of the main components of the controversy surrounding ICANN is whether it can represent a global society as a private entity and whether that private entity can represent Internet users. I focus my study on ICANN's Board of Directors. I evaluated the Board on the dimensions of descriptive, substantive, and formal representation (Pitkin 1967). Evaluation of ICANN's descriptive representation focused on the Board members' sex, educational backgrounds, and nationalities and compared the geographic representation on the Board to the global distribution of Internet users. The assessment of substantive representation looked at the Board members' votes to determine if patterns could be viewed based on members' descriptive characteristics. Finally, the evaluation of ICANN's formal representation examined its Bylaws, its 2006 contract with the U.S. Department of Commerce, and the California Nonprofit Public Benefit Corporations Code. The analysis found that the descriptive representativeness was low. The ICANN Board does not mirror Internet users: few women have served on the Board, those with technical educational backgrounds dominated, and the regions were not represented proportionate to their use of the Internet. Analysis of substantive representativeness was inconclusive and further investigation is needed. The formal representation analysis suggests that the ICANN Board has been formally representative. / Master of Arts