PENGARUH BOARD DIVERSITY, CEO CHARACTERISTICS DAN BOARD COMMITTEES TERHADAP FIRM PERFORMANCE PERBANKAN YANG TERDAFTAR DI BURSA EFEK INDONESIA

Board Committees , CEO Compensation , and Earnings Management ∗

We analyze the effect of committee formation on how corporate boards perform two main functions: setting CEO pay and overseeing the financial reporting process. The use of performance-based pay schemes induces the CEO to manipulate earnings, which leads to an increased need for board oversight. If the whole board is responsible for both functions, it is inclined to provide the CEO with a compen...

1 Board Diversity and Firm Performance Volatility

Diverse directors may have diverse preferences over firms’ policies or even objectives. As shown by Arrow (1951), diverse individual preferences may fail to univocally aggregate in collective preferences and may consequently lead to arbitrary and volatile decisions. Using the board of directors as a laboratory, we test whether diversity leads to higher performance volatility. We show that firms...

board and committees

The influence of board of director networks and corporate governance on firm performance and CEO compensation

CEO Compensation and Board Oversight

In response to the corporate scandals in 2001-2002, the major U.S. exchanges came up with new regulations which are intended to enhance board oversight. We use this regulation event to shed light on the effect of board oversight on CEO compensation. We find that firms that were not complying with these regulations decreased their CEO compensation by between 20%-25% upon compliance, compared to ...