The University of Southampton
University of Southampton Institutional Repository

The Implementation of the Corporate Governance Code in an African Developing Economy: A Longitudinal Study

Soobaroyen, Teerooven and Mahadeo, Jyoti Devi (2010) The Implementation of the Corporate Governance Code in an African Developing Economy: A Longitudinal Study At British Accounting Association Conference 2010, United Kingdom. 34 pp.

Record type: Conference or Workshop Item (Paper)

Abstract

This study investigates how listed companies have implemented the requirements of the corporate governance code in an African developing economy (Mauritius). There is still little empirical evidence as to whether (and if so to what extent) companies in developing economies on the African continent have been implementing such codes. Furthermore, we argue that past empirical studies have been too narrowly focused by only analysing one particular year of implementation and/or examining some requirements of the code. We seek to contribute to the literature by focusing on the progression (or the lack thereof) in the implementation and disclosure requirements of the code over time. This paper will hence rely on disclosures in the annual reports of listed companies in Mauritius over a four year period - namely one year (2004) prior to the code's enactment and thereafter for a period of three years (2005-2007). In addition, a notable aspect in the local code has been the requirement to provide corporate social responsibility (CSR) disclosures. In this respect, we examine the extent of progression of CSR disclosures in relation to the 'traditional' requirements of the corporate governance code. We hence bring some empirical evidence on the links between corporate governance and CSR to inform some of the recent conceptual discussions emerging in the literature. Finally, in contrast to the various un-weighted and dichotomous measures used in previous studies, a weighted scoring framework is devised to assess implementation consistently over the survey period.

The analysis of the scores reveals a progressive adoption of the code during the first two years (2005 and 2006) but this process has now slowed down. Although the overall level of adoption does appear to be beyond the mere symbolic, detailed implementation and disclosure requirements regarding directors' appraisal and training, determination of remuneration policies, remuneration information and directors' interest, and CSR disclosures are resisted by many companies. Furthermore, a correlation analysis of the corporate governance scores and firm level measures shows that the level of association between these different variables fluctuates significantly over time, except for the consistent positive influence of independent non-executive directors. The findings bring much needed empirical evidence on corporate governance in African developing nations and emphasise the need for researchers to study corporate governance implementation on a longitudinal basis. In particular, we contend that corporate governance changes at the board level (e.g. new composition, decision-making structures, empowerment over executives) are akin to an organisational change process that cannot be reliably assessed over a one year period. Furthermore, we demonstrate the relevance of a weighted and non-dichotomous scoring approach for the assessment of corporate governance implementation

PDF BAA_April_2010_Conference_Paper_Version.pdf - Author's Original
Restricted to Registered users only
Download (350kB)

More information

e-pub ahead of print date: 15 April 2010
Venue - Dates: British Accounting Association Conference 2010, United Kingdom, 2010-04-15
Keywords: corporate governance implementation, africa, mauritius

Identifiers

Local EPrints ID: 144133
URI: http://eprints.soton.ac.uk/id/eprint/144133
PURE UUID: c259ccdd-22c3-4b09-91f0-a07f8e5ae330

Catalogue record

Date deposited: 14 Apr 2010 08:23
Last modified: 18 Jul 2017 23:08

Export record

Contributors

Author: Teerooven Soobaroyen
Author: Jyoti Devi Mahadeo

University divisions

Download statistics

Downloads from ePrints over the past year. Other digital versions may also be available to download e.g. from the publisher's website.

View more statistics

Atom RSS 1.0 RSS 2.0

Contact ePrints Soton: eprints@soton.ac.uk

ePrints Soton supports OAI 2.0 with a base URL of http://eprints.soton.ac.uk/cgi/oai2

This repository has been built using EPrints software, developed at the University of Southampton, but available to everyone to use.

We use cookies to ensure that we give you the best experience on our website. If you continue without changing your settings, we will assume that you are happy to receive cookies on the University of Southampton website.

×