Corporate governance, board connections and remuneration

Good corporate governance underpins good corporate social responsibility (CSR) through value-creating stakeholder relationships. When properly composed and compensated, the board of directors, an important corporate governance mechanism, plays an efficient monitoring role, reducing agency cost. Exploring board connections and remuneration of the top 100 listed firms in the Stock Exchange of Thailand as a case study, we find evidence supporting agency cost of board connections such that politically connected board members are paid higher. However, politically connected board members play an effective monitoring role in setting top management pay, supporting stewardship and resource dependency theories. Our case study highlights the importance of balancing boards of directors' compositions and remunerations to achieve CSR outcomes and value creation among stakeholders.