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....

This study documents that the perception of high private control benefits in firms induces them to disclose private information about future earnings and cash flows through the practice of earnings smoothing. It also shows that this relationship is non-linear in nature. At low levels of...