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This paper aims to investigate the relationship between board interlocks and monitoring effectiveness for listed German companies in a context of risk governance. While agency-theory and resource-dependence-theory suggest a positive association between board interlocks and monitoring effectiveness, reasons such as limited temporal resources of busy board members may suggest a negative association.

By using panel data regression, the authors examined the association between board interlocks and monitoring effectiveness, which was approximated by excessive management compensation, pay-for-performance-sensitivity and CEO turnover-performance-sensitivity. The data set comprises 3,998 directorships for 132 listed German companies covering the period 2015-2017.

The authors find that board interlocks are associated with not only a more excessive management pay and less performance-sensitive turnover but also a higher pay-for-performance-sensitivity.

The study examines the impact of multiple directorships based on a German panel data set that includes both multiple appointments of members to national supervisory boards and all other appointments to national and international executive and supervisory bodies. The authors compile three measures to operationalize monitoring effectiveness.

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.

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.

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.

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.