Guest editorial

摘要

The papers in this special issue illustrate that a common theme of financial monitoring is the fine balance between monitoring's costs and benefits. Ideally, the benefit of monitoring is that it reduces the tendency of parties to act in their own best interests at the expense of others or the firm's resources. The costs of financial monitoring may take many forms. They may involve direct expenses associated with the creation of screening processes or the collection of additional data. Reduced growth may also be a cost if covenants or high levels of dividend commitment curtail investment. Finally, enhanced monitoring may have a societal cost if it diverts resources away from socially responsible activities.