- Title
- Corporate governance: a case of 'misplaced concreteness'?
- Creator
- Clarke, Frank; Dean, Graeme
- Relation
- Advances in Public Interest Accounting Vol. 11, p. 15-39
- Publisher Link
- http://dx.doi.org/10.1016/S1041-7060(05)11002-5
- Publisher
- JAI Press
- Resource Type
- journal article
- Date
- 2005
- Description
- Whitehead’s notion that if you say something for long enough, it will be believed, aptly describes the development of the latest corporate governance regimes. Curbing managerial opportunism is the current focus, but the regimes contain only more of what has failed in the past. Inexplicably, at a time when reformers are declaring their allegiance to principles over rules, long-standing principles are being by-passed and more rules imposed. Whereas much of what the rules address is contestable, the frequency with which it is proclaimed has been seductive – it is being accepted as if it were true, not by virtue of either convincing evidence or argument, but through the power of repetition. Stock options in executives remuneration packages are to be expensed, not because they satisfy expensing criteria, but because of the penetration of the mantra that they are expenses; independence is being accepted as the consequence of not being in particular relationships, not because that will change one’s state of mind, so much as it will appear likely to have done so; and impairment calculations are being declared superior to conventional amortization techniques, not because of any demonstration that they better indicate the decrease in the market price of a physical asset, but because of the repetition of the impairment litany. Corporate governance is being perceived as a set of processes, rules to be complied with, rather than the desired outcome of them – that is, the authority exercised with probity and unquestionable integrity over corporations’ affairs, for the public good. There is a less than clear explanation of whether or how the separate governance processes mesh with one another. The governance miasma confuses rather than clarifies corporate activity. Underpinnings of the mechanisms in the governance regimes have achieved a false status of concreteness. Contrary to the universal indoctrination, the case is stronger for fewer, rather than more, governance rules.
- Subject
- corporate governance; managerial opportunism; repetition
- Identifier
- http://hdl.handle.net/1959.13/927900
- Identifier
- uon:10284
- Identifier
- ISSN:1041-7060
- Language
- eng
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