Myths and ceremonies among the corporate governance institutions: introducing the concept of corporate governance culture

Abstract

Purpose The purpose of this study is to provide the conditions for governance effectiveness and explain why the same rules often result in not the same norms. Design/methodology/approach The author proposes a “corporate governance culture” concept explaining the differences within corporate governance institutions and making it possible to measure their effectiveness. Based on a literature review that included 186 research studies published in the corporate governance field, the author found that most (160) concern structural numerical variables. Only 26 refer to behavioural and cultural issues, and they support the idea of an interdisciplinary approach to governance problems. Findings A significant contribution of this paper is that it proposes an integrative framework that operationalises psychological, sociological and philosophical issues that influence corporate governance mechanisms. The proposed concept can reanimate the debate about the need for tight governance regulations or leaving room for a loose governance regime. Originality/value The idea of “corporate governance culture” explains the divergences identified in studies on corporate governance mechanisms, pointing out behavioural and cultural issues as crucial aspects of governance bodies.

What are the relations between the characteristics and context of the board and its effectivity in decision-making?

“…It explores the role of boards in ensuring accountability and effective governance (Jensen & Meckling, 1976;Fama & Jensen 1983). Among others, Klepczarek (2023) and Sierra-Morán (2021) state that most studies chose a single perspective for the evaluation of the results although most of the studies in this selection of articles state that this field of research cannot be fully understood from a single theoretical point of view. Furthermore, the studies in this selection indicate there is a lack of psychological and social behavioral perspectives in most research and this is needed to understand the process of decision-making in the boards of directors.…”

“…structured literature review a follow-up step of this research must be done from a multi-perspective approach (Klepczarek, 2023;Zahra & Pearce, 1989;Dalton et al 1998). The structured literature review will provide a more complete overview of the full set of perspectives to investigate this research field.…”

“…However, this takes us only partially on the way to a better understanding of this field of research. The challenge now is to get more grip on the mechanisms that are significant but difficult to observe and measure (Klepczarek, 2023). The next step in this research project, will be an exploratory step to generate a new (more complete) theoretical framework about the relationships between decision-making processes of boards, context factors and their effectiveness.…”