Do corporate governance Codes improve board accountability? Evidence from an emerging economy

Soobaroyen, Teerooven and Mahadeo, Jyoti Devi (2012) Do corporate governance Codes improve board accountability? Evidence from an emerging economy. Qualitative Research in Accounting & Management, 9 (4), 337-362. (doi:10.1108/11766091211282661).

Abstract

This study examines whether the expectations and requirements contained within the corporate governance code have an impact on how accountability is perceived, understood and practiced by company board members in an emerging economy (Mauritius). We rely on 24 semi-structured interviews of board members in listed and non-listed companies and also analyse the accountability implications present in the local code of corporate governance and relevant reports. Our analysis is informed by the typologies of board accountability and process developed by Roberts (2001) (socialising, individualising, sovereign and complementary) and is complemented by Pettigrew and McNulty’s (1995) notions of minimalist and maximalist boards.From a state which can largely be associated to the notion of sovereign governance and a minimalist board, our findings reveal a substantive change in the type of board accountability but it is one which privileges an individualising form of board interactions. A move to a more empowered ‘maximalist’ board is also noted. Notwithstanding, we uncover specific issues with the independent non-executive director (INED) as an accountability mechanism in that there is much fuzziness on his/her role and motivations and whether INEDs can conceivably contribute to a socialising form of board accountability. We respond to calls for more qualitative research on how boards actually operate in emerging economies, at a time when an increasing number of countries have adopted corporate governance requirements drawn primarily from the Anglo-American model. This paper contributes to the literature by providing empirical evidence on corporate board processes and dynamics in non-Western contexts.

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Contributors

Author: Teerooven Soobaroyen

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