Investment committees and corporate cash holdings

We investigate the association between the voluntary formation and characteristics of a board investment committee (hereafter IC) and corporate cash holdings. Delegating specific board functions to distinct committees facilitates the monitoring and specialization of board functions (Spira and Bender, 2004). Prior studies (Subramaniam, McManus, and Zhang, 2009) indicate that the existence of a board investment committee can ensure credible communication about an effective oversight of organizational risk management strategies and investment-related policies and processes. Yoder (2011) maintains that ICs provide critical oversight and expertise in the investment decision-making process (Ellis, 2011; Kearney, 2014). Hoskisson, Eden, Lau, and Wright (2000) call for further investigation into ICs to clearly understand their dynamics and how they enhance investment-related financial decision making in emerging markets such as those in the GCC. Given the increased focus on governance reform in the GCC countries, we investigate whether ICs affect firm-level operational decisions on corporate cash holdings.

We investigate the association between the voluntary formation and characteristics of a board investment committee (hereafter IC) and corporate cash holdings. Delegating specific board functions to distinct committees facilitates the monitoring and specialization of board functions (Spira and Bender, 2004). Prior studies (Subramaniam, McManus, and Zhang, 2009) indicate that the existence of a board investment committee can ensure credible communication about an effective oversight of organizational risk management strategies and investment-related policies and processes. Yoder (2011) maintains that ICs provide critical oversight and expertise in the investment decision-making process (Ellis, 2011; Kearney, 2014). Hoskisson, Eden, Lau, and Wright (2000) call for further investigation into ICs to clearly understand their dynamics and how they enhance investment-related financial decision making in emerging markets such as those in the GCC. Given the increased focus on governance reform in the GCC countries, we investigate whether ICs affect firm-level operational decisions on corporate cash holdings.