- 2015-03-09 (x)
- Gibson, Anna H. (x)
- Corporate governance. (x)
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Show moreThis research focused on corporate independent directors and senior executive officers: their perceptions of Sarbanes-Oxley; their roles and responsibilities as officers and directors; how board relationships have transformed as a result of Sarbanes-Oxley; and how the CEO-board and board member-board member trust dynamics impact the management of the board. Implicit in Sarbanes-Oxley is agency theory and the responsibility of independent directors to monitor and control management. The central findings are that independent directors and executive officers are culturally adapting to the new institutional environment of Sarbanes-Oxley, and their new relationship is characterized by “creative tension” whereby distinct and separate roles require mutual trust. Creative tension includes a trust dynamic of high trust/high distrust. The board member-board member relationship, an increasingly important factor in board functioning, is illuminated by stewardship theory, and requires mutual dependency among directors. The trust dynamic characteristic of this relationship is high trust/low distrust. Four governance types emerge; traditional, traditional-progressive, progressive-traditional and progressive in determining director roles. Success of the board depends on trust, yet Sarbanes-Oxley relies on a presumption of distrust, which can thwart creation of an effective and sustainable board.
Doctorate of Management Programs
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Show moreThe results of governance research are mixed concerning the financial consequences of externally induced regulations. The debate hinges on the assumption that adoption of regulation is an exogenous factor in determining performance. Drawing on basic insights from institutional theory and innovation studies, I argue that response to regulation is in fact a mediator of the relationship between ‘quality of governance’ and financial performance. Focusing on the adoption of Sarbanes-Oxley (Sarbox) regulation by publicly traded companies, I hypothesize that governance quality is likely to affect financial success by influencing organizational responses to Sarbox. Using multiple year data from two large datasets, I test the hypothesis and find considerable support for the argument. The results of two-stage least squares analysis suggest that, although response to Sarbox is not directly related to financial performance, quality of governance affects performance through the adoption of Sarbox. Companies with high quality of governance ratings adopt Sarbox more quickly and readily than others, and experience improved financial performance. The implications for governance research and management practice are discussed.
Doctorate of Management Programs
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