The Construction of Risk Management Credibility within Corporate Boardrooms

Gendron, Y., Brivot, M., and Guénin-Paracini, H. The construction of risk management credibility within corporate boardrooms. European Accounting Review. Forthcoming

33 Pages Posted: 17 Jun 2015

See all articles by Yves Gendron

Yves Gendron

Université Laval

Marion Brivot

Université Laval

Henri Guénin-Paracini

Université Laval - Faculté d'Administration

Date Written: June 15, 2015

Abstract

Despite various corporate collapses over the last decades, risk management is increasingly influential across organizations worldwide, as if the apparatus’ credibility was impermeable to scandals that, from critical angles, cast doubt on its efficacy. Relying on a cultural perspective of analysis highlighting the range of social processes that protect prevailing institutions’ legitimacy from aberrations, we examined the sense-making approaches employed by corporate boardroom actors to maintain their confidence in the credibility of the risk management apparatus despite being exposed to a continuous flow of corporate failures pointing to risk management efficacy limitations. Specifically, we conducted 35 interviews with corporate board stakeholders, mostly board members and corporate consultants. Our analysis indicates that actors involved in risk management processes tend to interpret aberration cases through perspectives that put the blame on some implementation deficiency, thereby ensuring that risk management’s core assumptions are not questioned. These perspectives point to a defensive system of thought grounded in the director and consultancy communities, whose main referents are subject to intense work and re-conceptualization in the aftermath of aberrations, thereby providing community members with the means to make sense of the frictions of organizational life in ways that maintain the legitimacy of the risk management apparatus.

Keywords: construction of legitimacy, purity boundaries, risk management, sense-making

Suggested Citation

Gendron, Yves and Brivot, Marion and Guénin-Paracini, Henri, The Construction of Risk Management Credibility within Corporate Boardrooms (June 15, 2015). Gendron, Y., Brivot, M., and Guénin-Paracini, H. The construction of risk management credibility within corporate boardrooms. European Accounting Review. Forthcoming, Available at SSRN: https://ssrn.com/abstract=2618638

Yves Gendron (Contact Author)

Université Laval ( email )

Faculte des sciences de l'administration
2325 rue de la Terrasse, Local 2636
Quebec City, Quebec G1V 0A6
Canada
418-656-2131 ext. 2431 (Phone)
418-656-7746 (Fax)

Marion Brivot

Université Laval ( email )

2325, rue de la Terrasse
Quebec, Quebec G1V0A6
Canada
4186562131(ext. 3199) (Phone)

Henri Guénin-Paracini

Université Laval - Faculté d'Administration ( email )

Quebec G1K 7P4
Canada

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