Corporate Governance, Accounting and Finance: A Review

77 Pages Posted: 2 Mar 2011

See all articles by Philip R. Brown

Philip R. Brown

UWA Business School, M250; Financial Research Network (FIRN)

Wendy Beekes

Lancaster University - Department of Accounting and Finance

Peter Verhoeven

Queensland University of Technology - QUT Business School; Financial Research Network (FIRN)

Abstract

We review accounting and finance research on corporate governance (CG). In the course of our review, we focus on a particularly vexing issue, namely endogeneity in the relationships between CG and other matters of concern to accounting and finance scholars, and suggest ways to deal with it. Given the advent of large commercial CG databases, we also stress the importance of how CG is measured and in particular, the construction of CG indices, which should be sensitive to local institutional arrangements, and the need to capture both internal and external aspects of governance. The ‘stickiness’ of CG characteristics provides an additional challenge to CG scholars. Better theory is required, for example, to explain whether various CG practices substitute for each other or are complements. While a multidisciplinary approach to developing better theory is never without its difficulties, it could enrich the current body of knowledge in CG. Despite the vastness of the existing CG literature, these issues do suggest a number of avenues for future research.

Keywords: Corporate governance, Agency costs, Directors, Duality, Board committees, Ownership structure, Shareholder activism, Auditor independence, Accounting quality, Endogeneity

JEL Classification: C30, C36, G30, G34, G38, K22, M48

Suggested Citation

Brown, Philip R. and Beekes, Wendy and Verhoeven, Peter, Corporate Governance, Accounting and Finance: A Review. Accounting & Finance, Vol. 51, No. 1, pp. 96-172, 2011. Available at SSRN: https://ssrn.com/abstract=1774327 or http://dx.doi.org/10.1111/j.1467-629X.2010.00385.x

Philip R. Brown

UWA Business School, M250 ( email )

Crawley, Western Australia 6009
Australia

Financial Research Network (FIRN)

C/- University of Queensland Business School
St Lucia, 4071 Brisbane
Queensland
Australia

HOME PAGE: http://www.firn.org.au

Wendy Beekes

Lancaster University - Department of Accounting and Finance ( email )

Lancaster LA1 4YX
United Kingdom
++44 (0)1524 593623 (Phone)

Peter Verhoeven

Queensland University of Technology - QUT Business School ( email )

GPO Box 2434
Brisbane, Queensland 4001
Australia

Financial Research Network (FIRN)

C/- University of Queensland Business School
St Lucia, 4071 Brisbane
Queensland
Australia

HOME PAGE: http://www.firn.org.au

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