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This paper aims to synthesize the diverse literature on nomination and remuneration committees and provide avenues for future research.

This study provides a comprehensive literature review of theoretical and empirical studies published in reputable international journals indexed by Scopus.

The literature review reveals several aspects of the nomination and remuneration committee. These aspects have been classified into the definition of the nomination and remuneration committee, dimensions of the nomination and remuneration committee, measurement and research review results, reasons for conflict empirical findings, company dynamics and research on moderators, as well as recommending future research.

Our literature review shows that nomination and remuneration committees play a role in improving board performance and company performance, reducing agency conflicts and improving corporate governance to provide implications for companies, regulators and investors and pave the way for future research.

This paper identifies issues related to nomination and remuneration committees, their theoretical and practical implications and avenues for future research.

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.

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.

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.

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.

Several mechanisms exist to address the low levels of gender and race diversity in boardrooms, including mandatory quotas, voluntary targets and investor activism. Based on the similarity-attraction theory, the authors investigated whether nomination committees of companies listed on the Johannesburg Stock Exchange (JSE) could serve as an internal change mechanism to promote board gender and race diversity.

Panel data on the gender and race diversity of the nomination committees and boards of the 40 largest listed companies (the JSE Top 40) were analysed over the period 2011- 2016. Panel regressions were conducted to investigate four hypothesised associations.

More diverse boards had significantly more diverse nomination committees in terms of both gender and race. A significant positive association was furthermore reported between the race diversity of nomination committees and the appointment of new directors of colour. The latter finding could partly be attributed to legislation to enhance black representation in all spheres of the South African economy.

South Africa offers a unique socio-political setting in which to conduct board diversity research. In line with the similarity-attraction theory, it is shown that diverse nomination committees have an essential role in setting and achieving board gender and race diversity targets.

Purpose – Institutional investors are facing increased pressure and threats of legislation from the European Union to abandon passive ownership strategies. This chapter investigates the legal prerequisites for active ownership among institutional investors in two Scandinavian countries to highlight differences in the legal framework that potentially account for apparent dissimilarities in the practice of shareholder activism.

Design/methodology/approach – Data on shareholder proposals from Danish and Swedish annual general meetings from 2006 throughout 2010 suggest that institutional investors are approximately a thousand times more active in Sweden than in Denmark.

Findings – The comparative study of the legal framework for shareholder activism shows diminutive legal distance in general, however, we find that the shareholder-based nomination committee employed in Sweden constitutes an exception. This is relevant, as such a setup transfers power from the board of directors to the owners. Presumably, this reduces the impact of free-rider and collective action problems, and increases the shareholders’ inclination to make proposals, which is also what we find. Moreover, we find other differences in the legal framework that support the transfer of power to the owners.

Research implications – We contribute to literature by investigating the importance of local governance mechanisms created by the legal framework – an area where research is scarce. The chapter discusses how two classical theoretical dilemmas – free-rider problems and collective action problems among shareholders – can be reduced by the implementation of local corporate governance elements.

Originality/value – The chapter outlines the actual practice of shareholder activism, in terms of proposals, in Denmark and Sweden, and highlights divergent legal elements which theoretically transfer power to the shareholders. Thus, regulators should be aware of the impact by local governance mechanisms, and how shareholders react under different legal prerequisites.

Indian Companies Act (2013) and revised clause 49 of Securities and Exchange Board of India (SEBI) provides for a major overhaul of corporate governance norms to be adopted by firms in India. Some of the key provisions of the act pertain to board subcommittees. Given this background, the chapter seeks to analyze the role of overall board composition and board subcommittees (audit, nomination and remuneration and risk management committee) on firm performance. In addition, the relationship between ownership and firm performance is analyzed. The study documents that large listed companies in India that have constituted a nomination and remuneration committee have had positive influence on firm performance as measured by Tobin’s Q (TQ). Board subcommittees’ (i.e., audit, nomination and remuneration and risk management committee) independence is positively associated with firm performance as measured by TQ. Overall, the board size is positively associated with firm performance. However, in the presence of a nomination and remuneration committee, board size is negatively associated with firm performance. This study offers insights for policymakers interested in analyzing corporate governance practices in terms of board subcommittees as evidenced from a developing economy such as India.

This paper seeks to examine the relationship between board committees and firm performance and the moderating effect of family ownership for public companies in Hong Kong.

This study employs publicly available data from financial databases and annual reports of a sample of 346 firm‐year observations of public companies in Hong Kong for the periods 2001‐2003.

The empirical evidence indicates that a nomination (remuneration) committee is positively (negatively) related to firm performance, depending on the independence of its composition. Furthermore, family ownership does have an adverse effect on the relationship between board committees, specifically the remuneration committee, and the performance of public companies in Hong Kong.

This study is based on publicly available data and the board process is not actually observed.

The effectiveness of a board committee is contingent on its independence and family ownership.

This paper provides empirical evidence that an independent board committee could enhance the corporate governance of public companies in Hong Kong and would be of interest to regulatory bodies, business practitioners, and academic researchers.

The purpose of this paper is to analyze the influence of financial, monitoring and experiential expertise of audit committee chair (ACC) and HR, monitoring and experiential expertise of nomination committee chair (NCC) on the financial performance (FP) of the firm.

Quantitative approach was used in this study to collect data from 50 non-financial firms of Pakistan and to analyze the data through e-views for testing hypotheses.

The findings revealed that financial and monitoring expertise of ACC and experiential expertise of NCC positively influence return on assets, return on equity and the net profit margin of the firm. However, no significant influence of experiential expertise of ACC and monitoring and HR expertise of NCC on FP was found.

The findings of this study will help firms of Pakistan to understand what expertise of their ACC and NCC can contribute to the enhancement of their FP. However, the current study examined the non-financial firms of Pakistan only.

Past studies have never shown the particular focus on different types of expertise of “Chairs” of nomination and audit committees in a combined research to analyze their impact on FP of firms. The present study has abridged this gap in the field of expertise of chairs of board committees so, it will open new areas of discussion for future researchers in domains of “agency theory”, “human capital theory” and corporate governance.

Board committees enable boards to function effectively, as committees improve the quality of corporate governance by fulfilling specific, assigned tasks. This study aims to explore how board structure, CEO duality and audit quality are associated with board committee structure in the context of an emerging market, namely, Turkey.

The sample consisted of 122 firms listed on the Industrial Index of Borsa Istanbul for the years between 2012 and 2014, inclusive, and this yielded 366 firm-year observations. To test the hypotheses, the panel data analysis method was used, which enabled the elimination of certain problems, such as multicollinearity and estimation bias, as well as specification of the time-variant association between the predictor variables and the output variable.

Board size, board independence and firm size had a positive association with the number and size of board committees, whereas CEO duality had a negative association with the number and size of board committees. Moreover, the appointment of female members on audit and corporate governance committees was more frequent in firms that had a high proportion of women on their boards. Finally, audit quality was positively associated with the existence of risk committee, the overall diversity of board committees and the diversity of corporate governance committees.

The study is not free from limitations. It covers the time span between 2012 and 2014; thus, readers should be cautious about generalizing these results longitudinally, as a different time periods could possibly yield different results. The second limitation concerns the fact that only industrial firms were sampled; thus, these findings may not be valid in other sectors.

The paper shifts the attention of researchers from overall board structure to board committee structure. The results of the study provide insights for policymakers, boards and shareholders. Policymakers can formulate boards and committees by considering these findings. Boards can benefit from the conclusions of this study in shaping their own structure and sub-committee structures. Current and potential shareholders may find the results of the study instructive in making investment decisions.

This study investigates the factors associated with the structure of overall and specific board committees. Additionally, while most prior research on board committees has sampled firms that are domiciled in developed countries, this study examines the subject in an emerging country context, namely Turkey. Moreover, this study adds to the literature by examining the association between audit quality and board committee structure, which has been largely neglected in prior literature.

The purpose of this study is to examine the influence of corporate governance mechanisms recommended by the Securities and Exchange Commission (SEC) of Ghana on firm performance as measured by accounting-based ratios (return on assets, return on equity and earning per share) as well as market-based measure (Tobin’s Q) among listed Ghanaian companies from 2006 to 2018. These mechanisms are: board composition (board size, inside directors and outside directors), board committees (audit, remuneration and nomination), chief executive officer (CEO) duality/separation, board meetings and shareholder concentration.

The study used panel regression analysis of data from 38 listed firms in Ghana from 2006 to 2018 to test how each corporate governance variable initiated by the SEC of Ghana contributed to firm performance. Data were extracted from the annual reports of listed companies.

The study found that the presence of both insiders and outsiders on the corporate board improved financial performance. Similarly, board size, frequency of board meetings and shareholder concentration/ownership structure generally had a positive impact on financial performance. However, the presence of board committees generally had a negative impact on financial performance while CEO duality had no impact on financial performance.

The study contributes to the understanding of how good corporate governance practices affect firm performance for both academics and particularly Ghanaian policymakers.

This study provided new findings to bridge the gaps in the general corporate governance literature relative to the lack of consensus on financial impacts of corporate governance mechanisms. The finding contributes to knowledge by providing new and original evidence that some current corporate governance mechanisms are not effective in minimizing the agency problem in a developing setting. Furthermore, the authors anticipate that the outcomes of this research, which so far is the most comprehensive study in the Ghanaian context in terms of the coverage of corporate governance mechanisms specified by the SEC of Ghana, can significantly shape corporate governance discourse, practices and policies in Ghana, particularly and in other developing countries generally to improve financial performance and corporate sustainability.

Based on the agency and resource dependence theories, this study aims to investigate whether nomination committee (NC) characteristics could serve as key attributes for reducing environmental, social and governance (ESG) disputes and whether NC composition affects the appointment of ESG-friendly directors to the board.

This study focuses on a sample of 30 global systemically important banks from 2015 to 2021. The authors estimate panel data models with fixed effects, clustering heteroskedastic standard errors at the bank level to account for the serial correlation of the dependent variables for each bank.

Banks’ exposure to ESG controversies can be reduced when NC members have specific skills, in particular when at least one member of this committee also belongs to the sustainability committee and is a foreign director. Moreover, banks’ ESG disputes decrease when the NC members are younger, while the share of independent NC members has a negative impact. Finally, a positive influence of NC composition and its members’ features as well as the appointment of ESG-friendly directors on the board is found.

The findings are particularly useful during periods such as the current one, when there is growing attention to both banks’ corporate governance, the subcommittees’ role and functioning and social and environmental issues. This study shows that the NC is important in reducing the likelihood of banks incurring ESG disputes and in appointing more ESG-friendly directors. NC effective functioning and its members’ qualities serve as a key attribute for fulfilling objective assessment and improving board effectiveness.