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Remuneration committee effectiveness and narrative remuneration disclosure

Version 2 2024-06-04, 01:27
Version 1 2016-03-31, 14:56
journal contribution
posted on 2024-06-04, 01:27 authored by Sutha KanapathippillaiSutha Kanapathippillai, SK Johl, G Wines
This paper investigates the impact of the effectiveness of remuneration committees on narrative voluntary disclosure of information on remuneration. We develop a composite measure as a proxy for remuneration committee effectiveness by incorporating remuneration committee size, remuneration committee independence, remuneration committee chairman’s independence, expertise and diligence. We find that both the existence and quality of a remuneration committee play a significant role in the decision to provide voluntary disclosure of remuneration actions and in the extent of this disclosure. Further analysis suggests that remuneration committee independence and diligence enhance the quality of remuneration committees. The results have policy implications for remuneration committees as an effective corporate governance mechanism.

History

Journal

Pacific Basin Finance Journal

Volume

40

Pagination

384-402

Location

Amsterdam, The Netherlands

ISSN

0927-538X

eISSN

1879-0585

Language

English

Publication classification

C1 Refereed article in a scholarly journal, C Journal article

Copyright notice

2016, Elsevier

Issue

Part B

Publisher

ELSEVIER