I know something you don't know!: The role of linking pin directors in monitoring and incentive alignment
| Autor: | Ravi Dharwadkar, SangHyun Suh, Pamela Brandes |
|---|---|
| Rok vydání: | 2015 |
| Předmět: |
050208 finance
Executive compensation business.industry Process (engineering) Strategy and Management Compensation (psychology) 05 social sciences Accounting Audit Public relations Board (committee) 0502 economics and business Specialization (functional) Incentive alignment Business and International Management business Knowledge transfer 050203 business & management |
| Zdroj: | Strategic Management Journal. 37:964-981 |
| ISSN: | 0143-2095 |
| DOI: | 10.1002/smj.2353 |
| Popis: | Increasing regulatory pressures have created specialization within boards, with more requirements and responsibilities being refocused to the committee level. Using data from S&P 1,500 firms, we find that board committee overlap associated with linking pin directors (i.e., those serving simultaneously on the audit and compensation committees) is an important conduit for knowledge transfer between boards' monitoring and incentive alignment functions. These directors are associated with lower executive compensation and influence pay mix. In studying the dynamics behind this process, we find that newly created linking pins improve monitoring effectiveness whereas recently dissolved linking pins decrease it. We also find that linking pins are all the more important when managers make less conservative accounting choices |
| Databáze: | OpenAIRE |
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