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Remuneration committee effectiveness and narrative remuneration disclosure

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  • Kanapathippillai, Sutharson
  • Johl, Shireenjit K.
  • Wines, Graeme

Abstract

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.

Suggested Citation

  • Kanapathippillai, Sutharson & Johl, Shireenjit K. & Wines, Graeme, 2016. "Remuneration committee effectiveness and narrative remuneration disclosure," Pacific-Basin Finance Journal, Elsevier, vol. 40(PB), pages 384-402.
    • Handle: RePEc:eee:pacfin:v:40:y:2016:i:pb:p:384-402
    DOI: 10.1016/j.pacfin.2016.02.006
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    3. M. V. Shivaani, 2018. "Does Regulatory Flexibility Affect Risk Disclosures in Annual Report?," Global Journal of Flexible Systems Management, Springer;Global Institute of Flexible Systems Management, vol. 19(4), pages 321-336, December.
    4. Nair, Rajiv & Muttakin, Mohammad & Khan, Arifur & Subramaniam, Nava & Somanath, V.S., 2019. "Corporate social responsibility disclosure and financial transparency: Evidence from India," Pacific-Basin Finance Journal, Elsevier, vol. 56(C), pages 330-351.
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    9. Kanapathippillai, Sutharson & Gul, Ferdinand & Mihret, Dessalegn & Muttakin, Mohammad Badrul, 2019. "Compensation committees, CEO pay and firm performance," Pacific-Basin Finance Journal, Elsevier, vol. 57(C).
    10. Sutharson Kanapathippillai & Dessalegn Mihret & Shireenjit Johl, 2019. "Remuneration Committees and Attribution Disclosures on Remuneration Decisions: Australian Evidence," Journal of Business Ethics, Springer, vol. 158(4), pages 1063-1082, September.

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    More about this item

    Keywords

    Corporate governance; Global financial crisis; Independence; Remuneration committee; Voluntary disclosure;
    All these keywords.

    JEL classification:

    • M21 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Economics - - - Business Economics
    • M48 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - Government Policy and Regulation

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