Header

UZH-Logo

Maintenance Infos

Applying the 'comply-or-explain' principle: discursive legitimacy tactics with regard to codes of corporate governance


Seidl, David; Sanderson, Paul; Roberts, John (2013). Applying the 'comply-or-explain' principle: discursive legitimacy tactics with regard to codes of corporate governance. Journal of Management and Governance, 17(3):791-826.

Abstract

The comply-or-explain principle is a central element of most codes of corporate governance. Originally put forward by the Cadbury Committee in the UK as a practical means of establishing a code of corporate governance whilst avoiding an inflexible “one size fits all” approach, it has since been incorporated into code regimes around the world. Companies can either comply with code provisions or may explain why they do not comply, i.e., why they deviate from a code provision. Despite its wide application very little is known about the ways in which comply-or-explain is used. In addressing this we employ legitimacy theory by which explanations for deviating can be understood as means of legitimizing the company’s actions. We analyzed the compliance statements and reports of 257 listed companies in the UK and Germany, producing some 715 records of deviation. From this we generated an empirically derived taxonomy of the explanations. In a second order analysis we examine the underlying logic and identify various legitimacy tactics. We discuss the consequences of these legitimacy tactics for code regimes and the implications for policy makers.

Abstract

The comply-or-explain principle is a central element of most codes of corporate governance. Originally put forward by the Cadbury Committee in the UK as a practical means of establishing a code of corporate governance whilst avoiding an inflexible “one size fits all” approach, it has since been incorporated into code regimes around the world. Companies can either comply with code provisions or may explain why they do not comply, i.e., why they deviate from a code provision. Despite its wide application very little is known about the ways in which comply-or-explain is used. In addressing this we employ legitimacy theory by which explanations for deviating can be understood as means of legitimizing the company’s actions. We analyzed the compliance statements and reports of 257 listed companies in the UK and Germany, producing some 715 records of deviation. From this we generated an empirically derived taxonomy of the explanations. In a second order analysis we examine the underlying logic and identify various legitimacy tactics. We discuss the consequences of these legitimacy tactics for code regimes and the implications for policy makers.

Statistics

Citations

Dimensions.ai Metrics

20 citations in Scopus®
55 citations in Microsoft Academic
Google Scholar™

Altmetrics

Downloads

1 download since deposited on 30 Jan 2012
1 download since 12 months
Detailed statistics

Additional indexing

Item Type:Journal Article, refereed, original work
Communities & Collections:03 Faculty of Economics > Department of Business Administration
Dewey Decimal Classification:330 Economics
Language:English
Date:2013
Deposited On:30 Jan 2012 15:48
Last Modified:21 Sep 2018 21:46
Publisher:Springer
ISSN:1385-3457
OA Status:Green
Publisher DOI:https://doi.org/10.1007/s10997-011-9209-y
Other Identification Number:merlin-id:6322

Download

Download PDF  'Applying the 'comply-or-explain' principle: discursive legitimacy tactics with regard to codes of corporate governance'.
Preview
Content: Published Version
Language: English
Filetype: PDF (Nationallizenz 142-005)
Size: 327kB
View at publisher