ABSTRACT
When organizational scandals occur, the common refrain among commentators is: ‘Where was the board in all this?’ ‘How could the directors not have known what was going on?’ and ‘Why didn't the board intervene?’ The scandals demonstrate that board monitoring of organizational performance is a matter of great importance. By monitoring, we mean the act of keeping the organization under review. In many English-speaking countries, directors have a legal duty of care, which includes duties to monitor the performance of their organizations (Hopt and Von Hippel 2010). However, statutory law typically merely states the duty, while providing little guidance on how that duty can be met.
