A Political Perspective on Business Elites and Institutional Embeddedness in theUKCode‐Issuing Process

Abstract

Manuscript Type Perspective Research Question/Issue What is the role of institutional actors and business elites in the development of UK corporate governance codes? In the current paper, we explore the UK code‐issuing process by focusing on the UK actors, their power and interplay. Research Findings/Insights Our findings indicate, first, that the comply‐or‐explain principle, intertwined with the rich issuance of codes, reflects the diversity and permissiveness of British society and its ability to absorb contested corporate practices in a way that manages to preserve the status quo. Second, the UK business elites preserve their position in the corporate arena by using the principle of good governance, including the possibility to deviate from best practices, as an instrument of neutralizing institutional change. Third, the UK institutional and societal embeddedness gives carte blanche to elites to use corporate governance practices to serve their own interest. Theoretical/Academic Implications By emphasizing the strategic behavior of business elites embedded in the UK institutional configuration, we offer a political perspective on the national contextuality of the code‐issuing process. The worldwide diffusion of codes should not dissimulate their cross‐national contested nature. Codes reflect potential redistribution of power among institutional actors and business elites as well as the struggle over corporate resources between corporate actors (i.e., shareholders and managers) in maintaining their status quo. Practitioner/Policy Implications Practitioners should perceive codes as having different meanings depending on national contexts and national political constituencies. Codes reflect constellations of actors such as managers, shareholders, regulators and others, whose approach to codes and strategic interests are at least as important to know and understand as the verbatim content of codes.

Corporate Governance Codes: A Review and Research Agenda

“…Up to the end of 2008, these articles (e.g., Cromme, 2005;Fernández-Fernández, 1999;Roberts, 2004;Webb, Beck, & McKinnon, 2003) describe the content of the first national code issued in a single country (e.g., Germany, UK, Russia, and Spain). In more recent years, our results show that studies extend their focus in two directions: first, they go beyond the experience of Western European countries and start to analyze emerging countries' codes (e.g., Nigeria, Hungary, Indonesia, Malaysia) and, second, they focus on the evolution of the content of national codes in several institutional settings (e.g., Martin, 2010 for Hungary;Haxhi et al, 2013 andNordberg & for the UK). For example, a recent article published by Haxhi et al (2013), on the development of corporate governance codes in the UK since the publication of the Cadbury Code, shows how good governance practices evolve over time in relation to several characteristics of boards of directors, such as board composition and independence, criteria for identifying an independent director, board performance evaluation, and composition of board sub-committees.…”

“…In more recent years, our results show that studies extend their focus in two directions: first, they go beyond the experience of Western European countries and start to analyze emerging countries' codes (e.g., Nigeria, Hungary, Indonesia, Malaysia) and, second, they focus on the evolution of the content of national codes in several institutional settings (e.g., Martin, 2010 for Hungary;Haxhi et al, 2013 andNordberg & for the UK). For example, a recent article published by Haxhi et al (2013), on the development of corporate governance codes in the UK since the publication of the Cadbury Code, shows how good governance practices evolve over time in relation to several characteristics of boards of directors, such as board composition and independence, criteria for identifying an independent director, board performance evaluation, and composition of board sub-committees. Finally, our analysis shows that the issuance of the Stewardship Code (2010 in the UK led to a new avenue of research on the role of institutional shareholders (e.g., Chiu, 2012;Reisberg, 2011).…”

“…Our analysis of publications on good governance codes up to the end of 2014 indicates that some of the gaps highlighted by a previous review on codes (Aguilera & Cuervo-Cazurra, 2009) have been appropriately, or at least partly, addressed. First, recent studies have started both to investigate how codes change over time (Johanson & Østergren, 2010;Nordberg & McNulty, 2013) and to explore the role of institutional actors and the business elite in the code-issuing political process (Haxhi et al, 2013). Second, some recent works have explored the impact of formal and informal institutions (including cultural variables) on the issuance of codes and on the types of issuer in different countries (Haxhi & van Ees, 2010).…”

How do external regulations shape the design of ethical tools in organisations? An open polity and sociology of compliance perspective

“…This is an area that deserves further inquiry, as ethical tools function as the lynchpin between external pressures and the internal implementation of ethics. Such an approach is attuned to recent studies that insist on the specific features of ethical tools and the potential organisational interests that are served in the development of such devices (see, e.g., Haxhi et al, 2013). We therefore consider the actors in charge of ethics as more than 'professionals' competing to shape interpretative processes in their organisation's responses to ethical regulations; we also consider them as 'designers' who are actively engaged in producing new ethical tools and who advance their own views though the design process.…”

El gobierno corporativo en el ámbito del sector público: un estudio bibliométrico en las revistas ubicadas en el área de Administración Pública

“…Estas culturas han venido incorporando su concepto y su forma de gestión a las estructuras empresariales con la intención de mejorar su eficiencia y eficacia en aras de una mayor competitividad (Weimer & Paper, 1999). En gran medida el GC viene teniendo una relevancia en el contexto internacional y su influencia se pone de manifiesto con la elaboración, por diversos países, de códigos de buenas prácticas (Haxhi, Ees & Sorge, 2013;Cuomo, Mallin & Zattoni, 2016). Los códigos se establecen con el objetivo de crear normas uniformes de buen gobierno basado en la autorregulación (Hooghiemstra & Van Ees, 2011).…”