Remuneration committee effectiveness and narrative remuneration disclosure

Sutharson Kanapathippillai, Shireenjit K. Johl and Graeme Wines

Pacific-Basin Finance Journal, 2016, vol. 40, issue PB, 384-402

Abstract: This paper investigates the impact of the effectiveness of remuneration committees on narrative voluntary disclosure of information on remuneration. We develop a composite measure as a proxy for remuneration committee effectiveness by incorporating remuneration committee size, remuneration committee independence, remuneration committee chairman's independence, expertise and diligence. We find that both the existence and quality of a remuneration committee play a significant role in the decision to provide voluntary disclosure of remuneration actions and in the extent of this disclosure. Further analysis suggests that remuneration committee independence and diligence enhance the quality of remuneration committees. The results have policy implications for remuneration committees as an effective corporate governance mechanism.

Keywords: Corporate governance; Global financial crisis; Independence; Remuneration committee; Voluntary disclosure (search for similar items in EconPapers)
JEL-codes: M21 M48 (search for similar items in EconPapers)
Date: 2016
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Citations: View citations in EconPapers (10)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:pacfin:v:40:y:2016:i:pb:p:384-402

DOI: 10.1016/j.pacfin.2016.02.006

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