 Board structure and role of monitoring committeesArun D. Upadhyay, Rahul Bhargava and Sheri D. Faircloth Journal of Business Research, 2014, vol. 67, issue 7, 1486-1492 Abstract: Regulators and researchers alike have focused significant attention on the structure of the corporate board. In general, the results of prior empirical studies suggest that larger boards are costly to firms because of communication and co-ordination problems. How firms use committees to mitigate these costs, however, has not received as much attention. Since boards delegate authority for specific tasks to monitoring committees with independent directors, we re-examine the impact of board structure on firm performance by specifically focusing on the number of monitoring committees. Using ROA and EVA, we find that board size is positively associated with firm performance when firms use more than three monitoring committees. We also find that the previously documented negative association between board size and Tobin's Q disappears when a firm uses more than three monitoring committees. Overall, the results suggest that firms use monitoring committees to mitigate the costs associated with larger boards. Keywords: Board composition; Monitoring committees; Corporate governance; Firm performance (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eee:jbrese:v:67:y:2014:i:7:p:1486-1492 DOI: 10.1016/j.jbusres.2013.07.017 Access Statistics for this article Journal of Business Research is currently edited by A. G. Woodside More articles in Journal of Business Research from Elsevier |
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