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

Remmer Sassen (University of Hamburg, Hamburg, Germany)
Miriam Stoffel (University of Hamburg, Hamburg, Germany)
Maximilian Behrmann (University of Hamburg, Hamburg, Germany)
Willi Ceschinski (University of Hamburg, Hamburg, Germany)
Hanh Doan (University of Hamburg, Hamburg, Germany)

Journal of Risk Finance

ISSN: 1526-5943

Article publication date: 20 August 2018

682

Abstract

Purpose

One 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/approach

A 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.

Findings

The 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/value

The 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.

Keywords

Acknowledgements

The authors thank three anonymous reviewers, Dr Clarissa Hauptmann, Kaylin Lang and Florian Behrmann for their valuable comments, which have greatly improved our paper. The authors are also grateful to the session participants at the 5th Risk Governance Conference hosted by the University of Siegen.

Citation

Sassen, R., Stoffel, M., Behrmann, M., Ceschinski, W. and Doan, H. (2018), "Effects of committee overlap on the monitoring effectiveness of boards of directors: a meta-analysis", Journal of Risk Finance, Vol. 19 No. 4, pp. 379-395. https://doi.org/10.1108/JRF-11-2017-0187

Publisher

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Emerald Publishing Limited

Copyright © 2018, Emerald Publishing Limited

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