Death by committee? An analysis of corporate board (sub-) committees *

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 subgroups, we assemble a detailed dataset on corporate boards (groups) and committees (subgroups). 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. Subgroups are relatively understudied, but our results suggest that they play an important role in group functioning and corporate governance. (c) 2021 Elsevier B.V. All rights reserved.