en pl
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Central European Management Journal

Zobacz wydanie
Rok 2017 
Tom 25 
Numer 3

The Quality of Explanations for Deviation from Principles of Corporate Governance. An Introduction

Izabela Koładkiewicz
Kozminski University

2017 25 (3) Central European Management Journal

DOI 10.7206/jmba.ce.2450-7814.202

Zawartość artykułu

Abstrakt

Purpose: The purpose of this paper is to summarize studies aiming to defne matters related to the quality of explanations found in corporate governance statements published by listed companies. Another important aspect of the conducted analysis is the identifcation of various dimensions of explanation quality.

Methodology: The character of the conducted research is that of an overview of literature devoted to the subject. Apart from scientifc articles, it covers European Union regulations, regulations characteristic of countries selected for the analysis (member states of the European Union), and applied solutions aimed at guaranteeing the desired quality of explanations for deviation included in corporate governance statements that are in the centre of attention.

Findings: The conducted analysis organizes the current knowledge concerning actions aimed at improving the quality of explanations for deviation from principles of corporate governance. Without a doubt, the primary pillar consists of the level of information and its quality, as found in explanations for shareholders. It is this quality that determines if the shareholder understands the processes occurring in the realm of corporate governance in the company.

Research limitations: The conducted analysis should be treated as an introduction to related research issues. It should be stressed that research into explanations provided by companies is still in the process of development, and the number of publications devoted to this topic is still modest.

Practical implications: The study fts in the research into the phenomena of the “comply or explain” mechanism as applied in practice, which according of many researchers, continues to be poorly investigated. In terms of the directions for further research, there are promising topics including e.g. identifcation of factors that may translate into the quality of such statements (e.g. ownership structure, identity of shareholders), the role that should be played by institutions involved in developing CG codes (i.e. their successive versions), and the involvement of the board of directors/ supervisory board in the evaluation process.

Originality: The present paper identifes the key factors perceived as determining the quality of corporate governance statements. In addition to that, it outlines new avenues for further investigation.

Powiązania

  1. Augilera, R.V. and Cuervo-Cazurra, A. (2009) Codes of Good Governance, Corporate Governance: An International Review, 17(3): 376–387, https://doi.org/10.1111/j.1467-8683.2009.00737.x [Google Scholar]
  2. Aguilera, R.V. and Cuervo-Cazurra, A. (2004). Codes of Good Governance Worldwide: What Is the Trigger? Organization Studies, 25: 415–443, https://doi.org/10.1177/0170840604040669 [Google Scholar]
  3. Andres, C. and Theissen, E. (2008). Setting a Fox to Keep the Geese: Does the Comply–or–Explain Principle Work? Journal of Corporate Finance, 14(3): 289–301. https://doi.org/10.1016/j.jcorpfn.2008.03.008 [Google Scholar]
  4. Arcot, S., Bruno, V. and Faure-Grimaudc, A. (2010). Corporate Governance in the UK: Is the Comply or Explain Approach Working? International Review of Law and Economics, 30: 193–201, https://doi.org/10.1016/j.irle.2010.03.002 [Google Scholar]
  5. Burton, P (2000). Antecedents and Consequences of Corporate Governance Structures. Corporate Governance: An International Review, 8: 194–203, https://doi.org/10.1111/1467-8683.00198 [Google Scholar]
  6. Cadbury Code (1992). The Financial Aspects of Corporate Governance. London: The Committee on the Financial Aspects of Corporate Governance and Gee and Co. Ltd. [Google Scholar]
  7. Campbell, D., Craven, B. and Shrives, P. (2003). Voluntary Social Reporting in Three FTSE Sectors: A Comment on Perception and Legitimacy. Accounting, Auditing and Accountability Journal, 16(4): 558–581, https://doi.org/10.1108/09513570310492308 [Google Scholar]
  8. Cuomo, F. Mallin, C. and Zattoni, A. (2016). Corporate Governance Codes: A Review and Research Agenda. Corporate Governance: An International Review, 24(3): 222–241, https://doi.org/10.1111/corg.12148 [Google Scholar]
  9. Deegan, C. (2002). The Legitimizing Effect of Social and Environmental Disclosures: A Theoretical Foundation. Accounting, Auditing and Accountability Journal, 15(3): 282–311, https://doi.org/10.1108/09513570210435852 [Google Scholar]
  10. DiMaggio, P. and Powel, W. (1983). The Iron Cage Revisited: Institutional Isomorphism and Collective Rationality in Organizational Fields. American Sociological Review, 48(2): 147–160, https://doi.org/10.2307/2095101 [Google Scholar]
  11. Dowling, J. and Pfeffer, J. (1975). Organizational Legitimacy: Social Values and Organizational Behavior. The Pacifc Sociological Review, 18(1): 122–136, https://doi.org/10.2307/1388226 [Google Scholar]
  12. Drobetz, W., Schillhofer, A. and Zimmermann, H. (2004). Corporate Governance and Expected Stock Returns: Evidence from Germany. European Financial Management, 10: 267–93, https://doi.org/10.1111/j.1354-7798.2004.00250.x [Google Scholar]
  13. Drobetz, W., Schillhofer, A. and Zimmermann, H. (2004). Corporate Governance and Expected Stock Returns: Evidence from Germany. European Financial Management, 10: 267–93, https://doi.org/10.1111/j.1354-7798.2004.00250.x [Google Scholar]
  14. Directive 2013/34/EU of the European Parliament and of the Council of 26 June 2013 on the annual fnancial statements, consolidated fnancial statements and related reports of certain types of undertakings, amending Directive 2006/43/EC of the European Parliament and of the Council and repealing Council Directives 78/660/EEC and 83/349/EEC. [Google Scholar]
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  16. European Commission (2014). The Commission Recommendation of 9 April 2014 on the quality of corporate governance reporting (“comply or explain”) (2014/208/EU), Offcial Journal of the European Union, L/109/43. [Google Scholar]
  17. European Commission (2011). The European Commission Green Paper on the EU Corporate Governance Framework. [Google Scholar]
  18. Fama, E. and Jensen, M. (1983). Separation of Ownership and Control. Journal of Law and Economics, 26: 301–325, https://doi.org/10.1086/467037 [Google Scholar]
  19. Ferrero Ferrero, I. and Ackrill, R. (2016). Europeanization and the Soft Law Process of EU Corporate Governance: How has the 2003 Action Plan Impacted on National Corporate Governance Codes? Journal of Common Market Studies, 54(4): 878–895, https://doi.org/10.1111/jcms.12344 [Google Scholar]
  20. Financial Reporting Council (FRC) (2012). What constitutes an explanation under comply-or-explain? Report of discussions between companies and investors. London: FRC, https://www.frc.org.uk/Our-Work/Publications/Corporate-Governance/What-constitutes-an-explanation-undercomply-or-ex.pdf (07.2016). [Google Scholar]
  21. Goncharov, I., Werner J.R. and Zimmermann, J. (2006). Does Compliance with the German Corporate Governance Code Have an Impact on Stock Valuation? An Empirical Analysis. Corporate Governance: An International Review, 14: 432–445, https://doi.org/10.1111/j.1467-8683.2006.00516.x [Google Scholar]
  22. Gray, R., Kouhy, R. and Lavers, S. (1995). Constructing a Research Database of Social and Environmental Reporting by UK Companies. Accounting, Auditing and Accountability Journal, 8(2): 78–101, https://doi.org/10.1108/09513579510086812 [Google Scholar]
  23. Grant Thornton (2015). Corporate Governance Review 2015 – Trust and Integrity: Loud and Clear? [Google Scholar]
  24. Grant Thornton (2011). Corporate Governance Review – A Changing Climate Fresh Challenges Ahead. London: Grant Thornton Risk Management Services, www.grant-thornton.co.uk/pdf/corporate_governance.pdf [Google Scholar]
  25. Hooghiemstra, R. (2012). What Determines the Informativeness of Firms’ Explanations for Deviations from the Dutch Corporate Governance Code? Accounting and Business Research, 42(1): 1–27, https://doi.org/10.1080/00014788.2011.600630 [Google Scholar]
  26. Hooghiemstra, R. and van Ees, H. (2011). Uniformity as Response to Soft Law: Evidence From Compliance and Non–Compliance with the Dutch Corporate Governance Code. Regulation & Governance, 5: 480–498, https://doi.org/10.1111/j.1748-5991.2011.01118.x [Google Scholar]
  27. Jerzemowska, M., Najman, K. and Campbell, K. (2010). A contribution to the evaluation of the Polish regulations on corporate governance. Journal of Management and Business Administration. Central Europe, 18(6). [Google Scholar]
  28. Karlsson-Vinkhuyzen, S. and Vihma, A. (2009). Comparing the Legitimacy and Effectiveness of Global, Hard and Soft Law: An Analytical Framework. Regulation & Governance: 400–420, https://doi.org/10.1111/j.1748-5991.2009.01062.x [Google Scholar]
  29. Keay, A. (2014). Comply or Explain in Corporate Governance Codes: In Need of Greater Regulatory Oversight? Legal Studies, 34: 279–304, https://doi.org/10.1111/lest.12014 [Google Scholar]
  30. Koładkiewicz, I. (2014). Dobre praktyki ładu korporacyjnego oraz ich transfer do twardego prawa. Perspektywa interesariuszy polskiego rynku kapitałowego. Studia Prawno-Ekonomiczne, 91(2): 193–212. [Google Scholar]
  31. MacNeil, I. and Li, X. (2006). Comply or Explain: Market Discipline and Non-Compliance with the Combined Code. Corporate Governance: An International Review, 14(5): 486–496, https://doi.org/10.1111/j.1467-8683.2006.00524.x [Google Scholar]
  32. Luo, Y. and Salterio, S.E. (2014). Governance Quality in a ‘Comply or Explain’ Governance Disclosure Regime. Corporate Governance: An International Review, 22: 460–481, https://doi.org/10.1111/corg.12072 [Google Scholar]
  33. OECD (2015). G20/OECD Principles Of Corporate Governance. [Google Scholar]
  34. Pass, C. (2006). The Revised Combined Code and Corporate Governance: An Empirical Sample of 50 Large UK Companies. Managerial Law, 48(5): 467–478, https://doi.org/10.1108/03090550610715963 [Google Scholar]
  35. RiskMetrics Group (2009). Study on Monitoring and Enforcement Practices in Corporate Governance in the Member States: Study on Monitoring and Enforcement Practices in Corporate Governance in the Member States. Brussels: European Commission, http://ec.europa.eu/internal_market/company/docs/ecgforum/studies/comply-or-explain-090923_ en.pdf (06.2016). [Google Scholar]
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  37. Seidl, D., Sanderson, P. and Roberts, J. (2013). Applying the ‘Comply-or-Explain’ Principle: Discursive Legitimacy Tactics with Regard to Codes of Corporate Governance. Journal of Management Governance, 17: 791–826, https://doi.org/10.1007/s10997-011-9209-y [Google Scholar]
  38. Seidl, D. (2007). Standard Setting and Following in Corporate Governance: An Observation – Theoretical Study of the Effectiveness of Governance Codes. Organization, 14(5): 705–727, https://doi.org/10.1177/1350508407080316 [Google Scholar]
  39. Sergakis, K. (2013). EU Corporate Governance: A New Supervisory Mechanism for the ‘Comply or Explain’ Principle? European Company & Financial Law Review: 394–431. [Google Scholar]
  40. Shrives, P.J. and Brennan, N.M. (2015). A Typology for Exploring the Quality of Explanations for Non–Compliance with UK Corporate Governance Regulations. The British Accounting Review, 47: 85–99, https://doi.org/10.1016/j.bar.2014.08.002 [Google Scholar]
  41. Suchman, M.C. (1995), Managing Legitimacy: Strategic and Institutional Approaches. Academy of Management Review, 20: 571–610. [Google Scholar]
  42. VonWerder, A., Talaulicar, T. and Kolat, G. (2005). Compliance with the German Corporate Governance Code: An Empirical Analysis of the Compliance Statements by German Listed Companies. Corporate Governance: An International Review, 13: 178–187, https://doi.org/10.1111/j.1467-8683.2005.00416.x [Google Scholar]
  43. Augilera, R.V. and Cuervo-Cazurra, A. (2009) Codes of Good Governance, Corporate Governance: An International Review, 17(3): 376–387, https://doi.org/10.1111/j.1467-8683.2009.00737.x [Google Scholar]
  44. Aguilera, R.V. and Cuervo-Cazurra, A. (2004). Codes of Good Governance Worldwide: What Is the Trigger? Organization Studies, 25: 415–443, https://doi.org/10.1177/0170840604040669 [Google Scholar]
  45. Andres, C. and Theissen, E. (2008). Setting a Fox to Keep the Geese: Does the Comply–or–Explain Principle Work? Journal of Corporate Finance, 14(3): 289–301. https://doi.org/10.1016/j.jcorpfn.2008.03.008 [Google Scholar]
  46. Arcot, S., Bruno, V. and Faure-Grimaudc, A. (2010). Corporate Governance in the UK: Is the Comply or Explain Approach Working? International Review of Law and Economics, 30: 193–201, https://doi.org/10.1016/j.irle.2010.03.002 [Google Scholar]
  47. Burton, P (2000). Antecedents and Consequences of Corporate Governance Structures. Corporate Governance: An International Review, 8: 194–203, https://doi.org/10.1111/1467-8683.00198 [Google Scholar]
  48. Cadbury Code (1992). The Financial Aspects of Corporate Governance. London: The Committee on the Financial Aspects of Corporate Governance and Gee and Co. Ltd. [Google Scholar]
  49. Campbell, D., Craven, B. and Shrives, P. (2003). Voluntary Social Reporting in Three FTSE Sectors: A Comment on Perception and Legitimacy. Accounting, Auditing and Accountability Journal, 16(4): 558–581, https://doi.org/10.1108/09513570310492308 [Google Scholar]
  50. Cuomo, F. Mallin, C. and Zattoni, A. (2016). Corporate Governance Codes: A Review and Research Agenda. Corporate Governance: An International Review, 24(3): 222–241, https://doi.org/10.1111/corg.12148 [Google Scholar]
  51. Deegan, C. (2002). The Legitimizing Effect of Social and Environmental Disclosures: A Theoretical Foundation. Accounting, Auditing and Accountability Journal, 15(3): 282–311, https://doi.org/10.1108/09513570210435852 [Google Scholar]
  52. DiMaggio, P. and Powel, W. (1983). The Iron Cage Revisited: Institutional Isomorphism and Collective Rationality in Organizational Fields. American Sociological Review, 48(2): 147–160, https://doi.org/10.2307/2095101 [Google Scholar]
  53. Dowling, J. and Pfeffer, J. (1975). Organizational Legitimacy: Social Values and Organizational Behavior. The Pacifc Sociological Review, 18(1): 122–136, https://doi.org/10.2307/1388226 [Google Scholar]
  54. Drobetz, W., Schillhofer, A. and Zimmermann, H. (2004). Corporate Governance and Expected Stock Returns: Evidence from Germany. European Financial Management, 10: 267–93, https://doi.org/10.1111/j.1354-7798.2004.00250.x [Google Scholar]
  55. Drobetz, W., Schillhofer, A. and Zimmermann, H. (2004). Corporate Governance and Expected Stock Returns: Evidence from Germany. European Financial Management, 10: 267–93, https://doi.org/10.1111/j.1354-7798.2004.00250.x [Google Scholar]
  56. Directive 2013/34/EU of the European Parliament and of the Council of 26 June 2013 on the annual fnancial statements, consolidated fnancial statements and related reports of certain types of undertakings, amending Directive 2006/43/EC of the European Parliament and of the Council and repealing Council Directives 78/660/EEC and 83/349/EEC. [Google Scholar]
  57. EcoDa (2015). Corporate Governance Compliance and Monitoring Systems across the EU. Enrione, A., Mazza, C. and Zerboni, F. (2006). Institutionalizing Codes of Good Governance. American Behavioral Scientist, 49: 961–973, https://doi.org/10.1177/0002764205285175 [Google Scholar]
  58. European Commission (2014). The Commission Recommendation of 9 April 2014 on the quality of corporate governance reporting (“comply or explain”) (2014/208/EU), Offcial Journal of the European Union, L/109/43. [Google Scholar]
  59. European Commission (2011). The European Commission Green Paper on the EU Corporate Governance Framework. [Google Scholar]
  60. Fama, E. and Jensen, M. (1983). Separation of Ownership and Control. Journal of Law and Economics, 26: 301–325, https://doi.org/10.1086/467037 [Google Scholar]
  61. Ferrero Ferrero, I. and Ackrill, R. (2016). Europeanization and the Soft Law Process of EU Corporate Governance: How has the 2003 Action Plan Impacted on National Corporate Governance Codes? Journal of Common Market Studies, 54(4): 878–895, https://doi.org/10.1111/jcms.12344 [Google Scholar]
  62. Financial Reporting Council (FRC) (2012). What constitutes an explanation under comply-or-explain? Report of discussions between companies and investors. London: FRC, https://www.frc.org.uk/Our-Work/Publications/Corporate-Governance/What-constitutes-an-explanation-undercomply-or-ex.pdf (07.2016). [Google Scholar]
  63. Goncharov, I., Werner J.R. and Zimmermann, J. (2006). Does Compliance with the German Corporate Governance Code Have an Impact on Stock Valuation? An Empirical Analysis. Corporate Governance: An International Review, 14: 432–445, https://doi.org/10.1111/j.1467-8683.2006.00516.x [Google Scholar]
  64. Gray, R., Kouhy, R. and Lavers, S. (1995). Constructing a Research Database of Social and Environmental Reporting by UK Companies. Accounting, Auditing and Accountability Journal, 8(2): 78–101, https://doi.org/10.1108/09513579510086812 [Google Scholar]
  65. Grant Thornton (2015). Corporate Governance Review 2015 – Trust and Integrity: Loud and Clear? [Google Scholar]
  66. Grant Thornton (2011). Corporate Governance Review – A Changing Climate Fresh Challenges Ahead. London: Grant Thornton Risk Management Services, www.grant-thornton.co.uk/pdf/corporate_governance.pdf [Google Scholar]
  67. Hooghiemstra, R. (2012). What Determines the Informativeness of Firms’ Explanations for Deviations from the Dutch Corporate Governance Code? Accounting and Business Research, 42(1): 1–27, https://doi.org/10.1080/00014788.2011.600630 [Google Scholar]
  68. Hooghiemstra, R. and van Ees, H. (2011). Uniformity as Response to Soft Law: Evidence From Compliance and Non–Compliance with the Dutch Corporate Governance Code. Regulation & Governance, 5: 480–498, https://doi.org/10.1111/j.1748-5991.2011.01118.x [Google Scholar]
  69. Jerzemowska, M., Najman, K. and Campbell, K. (2010). A contribution to the evaluation of the Polish regulations on corporate governance. Journal of Management and Business Administration. Central Europe, 18(6). [Google Scholar]
  70. Karlsson-Vinkhuyzen, S. and Vihma, A. (2009). Comparing the Legitimacy and Effectiveness of Global, Hard and Soft Law: An Analytical Framework. Regulation & Governance: 400–420, https://doi.org/10.1111/j.1748-5991.2009.01062.x [Google Scholar]
  71. Keay, A. (2014). Comply or Explain in Corporate Governance Codes: In Need of Greater Regulatory Oversight? Legal Studies, 34: 279–304, https://doi.org/10.1111/lest.12014 [Google Scholar]
  72. Koładkiewicz, I. (2014). Dobre praktyki ładu korporacyjnego oraz ich transfer do twardego prawa. Perspektywa interesariuszy polskiego rynku kapitałowego. Studia Prawno-Ekonomiczne, 91(2): 193–212. [Google Scholar]
  73. MacNeil, I. and Li, X. (2006). Comply or Explain: Market Discipline and Non-Compliance with the Combined Code. Corporate Governance: An International Review, 14(5): 486–496, https://doi.org/10.1111/j.1467-8683.2006.00524.x [Google Scholar]
  74. Luo, Y. and Salterio, S.E. (2014). Governance Quality in a ‘Comply or Explain’ Governance Disclosure Regime. Corporate Governance: An International Review, 22: 460–481, https://doi.org/10.1111/corg.12072 [Google Scholar]
  75. OECD (2015). G20/OECD Principles Of Corporate Governance. [Google Scholar]
  76. Pass, C. (2006). The Revised Combined Code and Corporate Governance: An Empirical Sample of 50 Large UK Companies. Managerial Law, 48(5): 467–478, https://doi.org/10.1108/03090550610715963 [Google Scholar]
  77. RiskMetrics Group (2009). Study on Monitoring and Enforcement Practices in Corporate Governance in the Member States: Study on Monitoring and Enforcement Practices in Corporate Governance in the Member States. Brussels: European Commission, http://ec.europa.eu/internal_market/company/docs/ecgforum/studies/comply-or-explain-090923_ en.pdf (06.2016). [Google Scholar]
  78. Rosińska, M. (2008). Analiza ekonomiczna przedsiębiorstwa w oparciu o teorie instytucjonalne – koncepcja instytucjonalizmu organizacyjnego przedsiębiorstw. Acta Universitatis Lodziensis Folia Oeconomica, 221: 257–275. [Google Scholar]
  79. Seidl, D., Sanderson, P. and Roberts, J. (2013). Applying the ‘Comply-or-Explain’ Principle: Discursive Legitimacy Tactics with Regard to Codes of Corporate Governance. Journal of Management Governance, 17: 791–826, https://doi.org/10.1007/s10997-011-9209-y [Google Scholar]
  80. Seidl, D. (2007). Standard Setting and Following in Corporate Governance: An Observation – Theoretical Study of the Effectiveness of Governance Codes. Organization, 14(5): 705–727, https://doi.org/10.1177/1350508407080316 [Google Scholar]
  81. Sergakis, K. (2013). EU Corporate Governance: A New Supervisory Mechanism for the ‘Comply or Explain’ Principle? European Company & Financial Law Review: 394–431. [Google Scholar]
  82. Shrives, P.J. and Brennan, N.M. (2015). A Typology for Exploring the Quality of Explanations for Non–Compliance with UK Corporate Governance Regulations. The British Accounting Review, 47: 85–99, https://doi.org/10.1016/j.bar.2014.08.002 [Google Scholar]
  83. Suchman, M.C. (1995), Managing Legitimacy: Strategic and Institutional Approaches. Academy of Management Review, 20: 571–610. [Google Scholar]
  84. VonWerder, A., Talaulicar, T. and Kolat, G. (2005). Compliance with the German Corporate Governance Code: An Empirical Analysis of the Compliance Statements by German Listed Companies. Corporate Governance: An International Review, 13: 178–187, https://doi.org/10.1111/j.1467-8683.2005.00416.x [Google Scholar]

Kompletne metadane

Cytowanie zasobu

APA style

Koładkiewicz, Izabela (2017). Koładkiewicz, I.. (2017). The Quality of Explanations for Deviation from Principles of Corporate Governance. An Introduction. Central European Management Journal, 25(3), 34-54. https://doi.org/10.7206/jmba.ce.2450-7814.202 (Original work published 2017)

MLA style

Koładkiewicz, Izabela. Koładkiewicz, I.. „The Quality Of Explanations For Deviation From Principles Of Corporate Governance. An Introduction”. 2017. Central European Management Journal, t. 25, nr 3, 2017, ss. 34-54.

Chicago style

Koładkiewicz, Izabela. Koładkiewicz, Izabela . „The Quality Of Explanations For Deviation From Principles Of Corporate Governance. An Introduction”. Central European Management Journal, Central European Management Journal, 25, nr 3 (2017): 34-54. doi:10.7206/jmba.ce.2450-7814.202.

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