AbstractBoard of director involvement in restructuring reveals whether restructuring is brought on as an action by the board in its central oversight role or whether managers are purusing positive strategic action or correction. Therefore, based on an integration of organization economics (agency theory and market for corporate control) and strategic management theory (internal control and strategic leadership contingencies), this research examines board involvement in restructuring. Board involvement is hypothesized to be contingent on the governance mechanisms used by the board to monitor top management, control emphasis used by managers to process strategic information and board and managerial characteristics. The basic premise of the paper is that, due to their oversight role, board members (especially outside directors) become involved in restructuring only when managerial strategy implementation appears to be deficient. Top management team equity stakes are found to be negatively related to board involvement in restructuring, while outside director ownership is found to be positively related. Emphasis on strategic controls by managers was found to be negatively related to board involvement in restructuring. Top management team tenure and top management organizational tenure are negatively related to board involvement. Outsider representation on the board is positively related to board involvement in restructuring, while board tenure was found to be unrelated. Results imply that incentives to monitor (ownership) and emphasis on strategic controls reinforced by higher top management team tenure result in less board involvement in restructuring. However, restructuring may be initiated by outsiders on the board when other governance and control mechanisms fail. This implies a substitution process between governance tactics (ownership vs. board monitoring) and internal controls (managerial vigilance).