Nomination committees in Australia, outcomes for influence of a powerful CEO and diversity

Natalie Elms and Pamela Fae Kent

Journal of Accounting Literature, 2023, vol. 46, issue 4, 481-509

Abstract: Purpose - The authors investigate the adoption of nomination committees in Australia and identify the managerial power perspective as one explanation for firms not establishing nomination committees. A positive outcome of establishing a nomination committee from the perspective of board diversity is also examined. Design/methodology/approach - The authors adopt an archival approach by collecting data for firms listed on the Australian Securities Exchange (ASX) during the period 2010 to 2018. The authors establish the prevalence of nomination committees for small medium and large Australian firms. Regression analyses are used to determine whether the power of the chief executive officer (CEO) influences the adoption of a nomination committee. The association between having nomination committee and board diversity is also analyzed using regression analyses. Findings - Less than half of firms adopt a nomination committee. Larger firms are more likely to adopt a nomination committee than medium and smaller sized firms. Firms with less powerful CEOs are more likely to adopt a nomination committee. Adoption of a nomination committee is also associated with greater board tenure dispersion and board gender diversity in medium and smaller sized firms. Originality/value - Evidence on nomination committees provides original research that extends previous research focusing on the audit, risk and remuneration committees and samples restricted to large firms. The nomination committee has an important role to play in the appointment of directors yet limited evidence exists of the adoption rate, explanation for non-adoption and benefits of adoption. The authors add to this evidence.

Keywords: Board of directors; Nomination committees; Board diversity; CEO power; Corporate governance; Comply or explain; M48 (search for similar items in EconPapers)
Date: 2023
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://www.emerald.com/insight/content/doi/10.110 ... d&utm_campaign=repec (text/html)
https://www.emerald.com/insight/content/doi/10.110 ... d&utm_campaign=repec (application/pdf)
Access to full text is restricted to subscribers

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eme:jalpps:jal-12-2022-0132

DOI: 10.1108/JAL-12-2022-0132

Access Statistics for this article

Journal of Accounting Literature is currently edited by Professor Martina Linnenluecke and Professor Tom Smith

More articles in Journal of Accounting Literature from Emerald Group Publishing Limited
Bibliographic data for series maintained by Emerald Support ().