Abstract

Theoretical models of groups suggest that sub-group usage can affect communication among members and group decision-making. To examine the trade-offs from forming sub-groups, we assemble a detailed dataset on corporate boards (groups) and committees (sub-groups). Boards have increasingly used committees formally staffed entirely by outside directors. Our data show that twenty-five percent of all director meetings occurred in such committees in 1996; this increased to 45% by 2010. Our evidence suggests that granting formal authority to such committees can impair communication and decision-making. Sub-groups are relatively understudied, but our results suggest that they play an important role in group functioning and corporate governance.

Full Text
Published version (Free)

Talk to us

Join us for a 30 min session where you can share your feedback and ask us any queries you have

Schedule a call