Board executive committees, board decisions, and firm value
Date
2019ISSN
0929-1199Source
Journal of Corporate FinanceVolume
58Pages
43-63Google Scholar check
Metadata
Show full item recordAbstract
We study board executive committees for which, despite their broad powers, there exists limited empirical evidence. We find empirically robust evidence that firms with executive committees have lower market values. We also identify a link between executive committees, CEO turnover, and investment policies. This evidence suggests that, on balance, the agency and information costs associated with executive committee use outweigh the corresponding benefits. Together with technological advancements, our findings help to explain the sharp decline in executive committee use in recent years.