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Effects of committee overlap on the monitoring effectiveness of boards of directors: a meta-analysis

Effects of committee overlap on the monitoring effectiveness of boards of directors: a meta-analysis PurposeOne group of risk governance actors that recently came into focus for empirical studies is the board of directors. In this context, the increasing number of directors that work on more than one board committee (committee overlap) as well as its effects on monitoring effectiveness has become a prevalent subject of discussion. In this context, this paper aims to investigate the current status of empirical research on how committee overlap affects monitoring effectiveness.Design/methodology/approachA meta-analytical approach is used, encompassing a total sample of 167,449 observations. The authors consider several determinants of monitoring effectiveness such as reporting quality, executive compensation, pay for performance-sensitivity, CEO turnover, audit fees, qualified audit opinion and investment/overinvestment.FindingsThe authors’ meta-analysis proves that research on the effects of committee overlap yielded highly controversial results. Although there is no correlation between overlap and monitoring effectiveness at the general level, the presence of their relationship is still confirmed in a few subcategories. The authors also verify that the legal requirements regarding board structure and committee overlap has a certain influence, particularly in the common law system.Originality/valueThe meta-analytical insights help to derive statements that are more comprehensive and go beyond the results of the investigated primary studies. Furthermore, the insights offer implications for firms, theory and new opportunities regarding future empirical research to address unresolved questions. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png The Journal of Risk Finance Emerald Publishing

Effects of committee overlap on the monitoring effectiveness of boards of directors: a meta-analysis

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References (41)

Publisher
Emerald Publishing
Copyright
Copyright © Emerald Group Publishing Limited
ISSN
1526-5943
DOI
10.1108/JRF-11-2017-0187
Publisher site
See Article on Publisher Site

Abstract

PurposeOne group of risk governance actors that recently came into focus for empirical studies is the board of directors. In this context, the increasing number of directors that work on more than one board committee (committee overlap) as well as its effects on monitoring effectiveness has become a prevalent subject of discussion. In this context, this paper aims to investigate the current status of empirical research on how committee overlap affects monitoring effectiveness.Design/methodology/approachA meta-analytical approach is used, encompassing a total sample of 167,449 observations. The authors consider several determinants of monitoring effectiveness such as reporting quality, executive compensation, pay for performance-sensitivity, CEO turnover, audit fees, qualified audit opinion and investment/overinvestment.FindingsThe authors’ meta-analysis proves that research on the effects of committee overlap yielded highly controversial results. Although there is no correlation between overlap and monitoring effectiveness at the general level, the presence of their relationship is still confirmed in a few subcategories. The authors also verify that the legal requirements regarding board structure and committee overlap has a certain influence, particularly in the common law system.Originality/valueThe meta-analytical insights help to derive statements that are more comprehensive and go beyond the results of the investigated primary studies. Furthermore, the insights offer implications for firms, theory and new opportunities regarding future empirical research to address unresolved questions.

Journal

The Journal of Risk FinanceEmerald Publishing

Published: Aug 20, 2018

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