The focus of this dissertation was to analyze the association between corporate governance, strategy, and performance. Specifically, two research questions have been explored in the context of five essays.

First, this dissertation explores how employees’ oversight activities affect corporate performance. In particular, I analyze the consequences of employees’ influence through board-level employee representation. Having employee representatives on corporate boards increases the influence of employees within the firm and is therefore expected to affect the perceptions of good corporate governance and expectations regarding value distribution within the firm as well, which should ultimately affect performance. The results of essays (I) and (II) align with this argument, indicating that codetermination is associated with a decrease in market value, has no effect on profitability, and reduces aggressive financial and tax reporting.

Second, this dissertation analyzes how specific organizational decisions affect corporate performance_. Firms take measures to meet expectations regarding both performance and value distribution, but the benefits of these measures are not sufficiently clear, for example, due to opposing results and arguments in the literature. Essays (III), (IV), and (V) explore the benefits from investing in internal audit activities beyond benchmark expectations, examine the strategy-performance relationship, and show the sensitivity of prior results on the market valuation of conglomerates.