Textual Construction of Comparative Space: How Analyst Corporate Governance Reports Redefine and Create ‘Best Practice’

Accounting, Auditing & Accountability Journal (2018)

39 Pages Posted: 29 Apr 2020

See all articles by Zhiyuan Simon Tan

Zhiyuan Simon Tan

The University of Sydney Business School

Date Written: March 7, 2018


Purpose – This paper seeks to contribute to scholarly work on the role of sell-side financial analysts in corporate governance. It examines the more recent work products pertaining specifically to corporate governance that analysts based in the US and UK have generated in the past two decades, namely, their corporate governance reports (CG reports). Specifically, this paper focuses on analysing how analyst CG reports constitute a comparative space in which the governance procedures of companies are evaluated and ‘best practices’ are created.

Design/methodology/approach – This study involves a social constructivist textual analysis of 48 CG reports produced by analysts based in the US and UK between 1998 and 2009.

Findings – Analyst CG reports textually construct a comparative space comprising four dimensions. First, the space is constructed for some carefully edited users to evaluate the governance of companies. Second, the construction of this space requires the selection of ‘building materials’, i.e., governance issues included in the space that render companies amenable to evaluation and comparison. Third, by linking the range of governance issues chosen to formal regulations, firms are rendered governable and regulatory requirements reinterpreted. Lastly, by using different types of inscriptions, such as narratives and tables, the space highlights ‘winners’, i.e., those companies which do better than others, and constructs their governance procedures as ‘best practices’.

Research limitations/implications – This research provides a first step towards an in-depth understanding of analyst CG reports. The insights from this paper generate a range of areas for future research, including how these reports are produced and used.

Originality/value – This paper adds to the existing literature focusing on the role of analysts in corporate governance. It extends previous studies by examining the more recent and debatable work products generated by analysts, namely, their CG reports, and suggests an extended corporate governance role for them. Theoretically, analyst CG reports are conceptualised as ‘inscriptions’ that construct ‘documentary reality’. The notion of ‘editing’ is also drawn upon, to analyse a particular way in which documentary reality is constructed. Accordingly, this paper broadens the theoretical perspectives used in corporate governance research.

Keywords: Comparative space, corporate governance reports, editing, inscriptions, sell-side financial analysts, textual reality construction

JEL Classification: M40,G34

Suggested Citation

Tan, Simon, Textual Construction of Comparative Space: How Analyst Corporate Governance Reports Redefine and Create ‘Best Practice’ (March 7, 2018). Accounting, Auditing & Accountability Journal (2018), Available at SSRN: https://ssrn.com/abstract=3568837

Simon Tan (Contact Author)

The University of Sydney Business School ( email )

Codrington Building, 21-23 Codrington Street
Sydney, NSW 2006

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