Antecedents of and outcomes after finance committee use

We study why firms voluntarily create and use finance committees and whether firms realize benefits. Firms are more likely to have a finance committee when they have defined benefit pension plans, debt equity issuance and active dividend payout. Capital expenditures, restructuring, material weaknesses in internal controls and restatements are drivers of creating a finance committee. While we find a weak association between finance committee use and financial performance on average, we find that finance committees that are highly independent have better‐performing investments. Finance committees contribute to lowering the cost of debt for firms with small audit committees.