I know something you don't know!: The role of linking pin directors in monitoring and incentive alignment

• 成果类型: Article
• 署名作者: Brandes, Pamela; Dharwadkar, Ravi; Suh, Sanghyun
• 署名单位: Syracuse University; University of Massachusetts System; University of Massachusetts Lowell
• 刊物名称: STRATEGIC MANAGEMENT JOURNAL
• ISSN/ISSBN: 0143-2095
• DOI: 10.1002/smj.2353
• 发表日期: 2016
• 页码: 964-981
• 关键词: Boards; Executive compensation; monitoring; Board committees; Agency conflicts

摘要

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. Copyright (c) 2014 John Wiley & Sons, Ltd.