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

Author

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  • Remmer Sassen
  • Miriam Stoffel
  • Maximilian Behrmann
  • Willi Ceschinski
  • Hanh Doan

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.

Suggested Citation

  • Remmer Sassen & Miriam Stoffel & Maximilian Behrmann & Willi Ceschinski & Hanh Doan, 2018. "Effects of committee overlap on the monitoring effectiveness of boards of directors: a meta-analysis," Journal of Risk Finance, Emerald Group Publishing Limited, vol. 19(4), pages 379-395, August.
    • Handle: RePEc:eme:jrfpps:jrf-11-2017-0187
    DOI: 10.1108/JRF-11-2017-0187
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    Citations

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    Cited by:

    1. Ralf Winkler & Maximilian Behrmann, 2019. "Aufsichtsratsvergütung und Überwachungseffektivität: Empirische Befunde für börsennotierte Gesellschaften in Deutschland [Supervisory Board Compensation and Monitoring Effectiveness: Evidence from ," Schmalenbach Journal of Business Research, Springer, vol. 71(3), pages 381-414, November.
    2. Ding, Bin Yan & Wei, Feng, 2023. "Overlapping membership between risk management committee and audit committee and bank risk-taking: Evidence from China," International Review of Financial Analysis, Elsevier, vol. 86(C).
    3. Wan-Hussin, Wan Nordin & Fitri, Hadiati & Salim, Basariah, 2021. "Audit committee chair overlap, chair expertise, and internal auditing practices: Evidence from Malaysia," Journal of International Accounting, Auditing and Taxation, Elsevier, vol. 44(C).

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