Purpose – The purpose of this paper is to investigate the orientation of a firm's governance choices along a continuum of shareholder voice to managerial power and tests whether the governance orientation of a firm can survive regulation. Design/methodology/approach – Using a sample of 873 firms, a set of three index measures is constructed reflecting the orientation of a firm's governing rules, the orientation of the board of directors and the overall orientation of both types of governance structures. The resulting measures are compared pre‐ and post‐SOX. Findings – While specific, individual governance components, such as independence, can be regulated, the overall orientation of a firm's governance mechanisms, as manifested by its aggregate choice of governance structures, appears to be constant overtime suggesting that it is difficult to regulate the governance orientation of a firm. Research limitations/implications – The findings may be limited due to sample bias. There is both survivor bias and listing bias in the sample. To be included in the sample, firms needed to be publicly listed from 1998 through 2006 and needed to be listed on a major S&P index for each of those years. Practical implications – The paper highlights ways in which companies circumvent the intention of regulations such as SOX. The paper therefore has implications for regulators and shareholders. Originality/value – While the index method has been used before it has not been used to compare the impact of regulation on governance orientation. That makes this paper of value to regulators when considering the cost and benefit of regulations.
Journal of Accounting & Organizational Change – Emerald Publishing
Published: Sep 14, 2012
Keywords: Governance culture; Regulation; Corporate governance; Governance
It’s your single place to instantly
discover and read the research
that matters to you.
Enjoy affordable access to
over 18 million articles from more than
15,000 peer-reviewed journals.
All for just $49/month
Query the DeepDyve database, plus search all of PubMed and Google Scholar seamlessly
Save any article or search result from DeepDyve, PubMed, and Google Scholar... all in one place.
Get unlimited, online access to over 18 million full-text articles from more than 15,000 scientific journals.
Read from thousands of the leading scholarly journals from SpringerNature, Wiley-Blackwell, Oxford University Press and more.
All the latest content is available, no embargo periods.
“Hi guys, I cannot tell you how much I love this resource. Incredible. I really believe you've hit the nail on the head with this site in regards to solving the research-purchase issue.”Daniel C.
“Whoa! It’s like Spotify but for academic articles.”@Phil_Robichaud
“I must say, @deepdyve is a fabulous solution to the independent researcher's problem of #access to #information.”@deepthiw
“My last article couldn't be possible without the platform @deepdyve that makes journal papers cheaper.”@JoseServera