Effect of overlapping audit and compensation committee memberships on the readability of management compensation reports in the German HDAX
Publikation: Beiträge in Zeitschriften › Zeitschriftenaufsätze › Forschung › begutachtet
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in: Journal of Managerial Issues, Jahrgang 33, Nr. 1, 2021, S. 27-48.
Publikation: Beiträge in Zeitschriften › Zeitschriftenaufsätze › Forschung › begutachtet
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TY - JOUR
T1 - Effect of overlapping audit and compensation committee memberships on the readability of management compensation reports in the German HDAX
AU - Velte, Patrick
PY - 2021
Y1 - 2021
N2 - This study focuses on the relationship between board effectiveness andmanagement compensation reporting. Specifically, the effect of overlappingmemberships in audit and compensation committees (OMAC) on the readabilityof management compensation reports (MCR) is analyzed. Using archival datafrom firms listed on the German HDAX between 2014 and 2018 (329 firm-yearobservations) and the Flesch Reading Ease index, regression analysis shows apositive significant effect of OMAC on MCR. Similar statistical results are foundin a robustness check, which refers to an alternative readability score (theGunning Fog index). Several corporate governance and firm characteristics areincluded as control variables, and fixed-effects panel regressions are used. Thisstudy provides empirical support for the agency-theoretical assumption thatboard effectiveness and knowledge spillovers decrease conflicts of interest andinformation asymmetry between boards of directors and shareholders.
AB - This study focuses on the relationship between board effectiveness andmanagement compensation reporting. Specifically, the effect of overlappingmemberships in audit and compensation committees (OMAC) on the readabilityof management compensation reports (MCR) is analyzed. Using archival datafrom firms listed on the German HDAX between 2014 and 2018 (329 firm-yearobservations) and the Flesch Reading Ease index, regression analysis shows apositive significant effect of OMAC on MCR. Similar statistical results are foundin a robustness check, which refers to an alternative readability score (theGunning Fog index). Several corporate governance and firm characteristics areincluded as control variables, and fixed-effects panel regressions are used. Thisstudy provides empirical support for the agency-theoretical assumption thatboard effectiveness and knowledge spillovers decrease conflicts of interest andinformation asymmetry between boards of directors and shareholders.
KW - Management studies
KW - audit committee
KW - compensation committee
KW - management compensation reporting
KW - overlapping membership
KW - corporate goverannce
UR - https://www.pittstate.edu/business/journals/journal-of-managerial-issues.html#undefined11
UR - https://www.pittstate.edu/business/_files/documents/jmi/jmi-text-spring-2021-web.pdf
M3 - Journal articles
VL - 33
SP - 27
EP - 48
JO - Journal of Managerial Issues
JF - Journal of Managerial Issues
SN - 1045-3695
IS - 1
ER -