The penalty to hit is represented in composite bows. They have a certain strength rating and if your strength modifier is less than the rating you have a penalty to hit. The strength rating also limits bonus damage from Str.
For instance composite longbow (+1) would require a Str of 12 or more to use without penalty and allows you to add +1 to damage, even if your Str is 14 or higher you would only add +1 with this bow.