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Delegation of board work to committees in Europe

Author

Listed:
  • Pablo de Andrés

    (Autónoma University of Madrid)

  • Laura Arranz-Aperte

    (Autónoma University of Madrid
    Hanken School of Economics)

  • Juan Antonio Rodríguez-Sanz

    (University of Valladolid)

Abstract

A sample of 6169 firm year observations in 14 western European countries between 2002 and 2009 is used to investigate how committee practice within boards of directors is related to company characteristics, and to the existence of alternative corporate governance instruments in place. We find that committees in Europe are prevalent in larger companies, and in companies with large and independent boards. However, we also find that leverage, director interlocking, concentrated ownership, and the presence of managers on the board mitigate the use of committees, suggesting that committee use is limited by the existence of alternative governance mechanisms. Consequently, recent regulatory changes in Europe that promote the creation of committees within boards may be unsuited for certain types of company, especially smaller companies and those with concentrated ownership.

Suggested Citation

  • Pablo de Andrés & Laura Arranz-Aperte & Juan Antonio Rodríguez-Sanz, 2017. "Delegation of board work to committees in Europe," Economics of Governance, Springer, vol. 18(2), pages 179-208, May.
    • Handle: RePEc:spr:ecogov:v:18:y:2017:i:2:d:10.1007_s10101-017-0191-y
    DOI: 10.1007/s10101-017-0191-y
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    References listed on IDEAS

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    More about this item

    Keywords

    Board of directors; Committees; Corporate governance; European companies;
    All these keywords.

    JEL classification:

    • G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance
    • L51 - Industrial Organization - - Regulation and Industrial Policy - - - Economics of Regulation
    • M52 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Personnel Economics - - - Compensation and Compensation Methods and Their Effects

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