Abstract
Indian Companies Act (2013) and revised clause 49 of Securities and Exchange Board of India (SEBI) provides for a major overhaul of corporate governance norms to be adopted by firms in India. Some of the key provisions of the act pertain to board subcommittees. Given this background, the chapter seeks to analyze the role of overall board composition and board subcommittees (audit, nomination and remuneration and risk management committee) on firm performance. In addition, the relationship between ownership and firm performance is analyzed. The study documents that large listed companies in India that have constituted a nomination and remuneration committee have had positive influence on firm performance as measured by Tobin’s Q (TQ). Board subcommittees’ (i.e., audit, nomination and remuneration and risk management committee) independence is positively associated with firm performance as measured by TQ. Overall, the board size is positively associated with firm performance. However, in the presence of a nomination and remuneration committee, board size is negatively associated with firm performance. This study offers insights for policymakers interested in analyzing corporate governance practices in terms of board subcommittees as evidenced from a developing economy such as India.
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