Add to ORKGTo handle growing complexity, board committees have become increasingly important in today’s business environment. Specialized committees allow boards to build up expertise, and such domain-specific expertise in turn should facilitate effective decision-making. However, the dynamics created by committee membership may also have adverse effects on the board’s ability to fulfil its monitoring role. In this study, we argue that committee membership can give rise to the emergence of faultlines and the creation of subgroups in the board, and examine how this affects CEO compensation decisions. Using data from S&P 900 firms, we find that the effect of board faultlines on CEO compensation is contingent upon the subgroup to which the CEO belongs. S...