Audit committee members’ professional identities: Evidence from the field

Kara M. Obermire, Jeffrey R. Cohen and Karla M. Zehms

Accounting, Organizations and Society, 2021, vol. 93, issue C

Abstract: We advance social identity theory in the context of corporate governance research by evaluating how experiences outside the audit committee (AC) relate to AC members’ (ACMs’) professional identities and how these identities then map into ACMs’ responsibilities, how ACMs perceive that they add value, and how ACMs aid in the resolution of difficult judgments and decisions. We identify and evaluate four non-exclusive ACM social identities: executive management, financial management, investment management, and audit partner. We find that prior experiences relate to the social identities with which ACMs identify, yet identities also develop without role-relevant experiences. Interpreting the interviews leads us to propose a novel theory – mediational activism – a hybrid perspective whereby the ACM acts in multiple seemingly incongruent modes as a monitor, collaborator, and/or advocate with the intent to organize collective understanding, action, and mutually equitable outcomes. We find that ACMs’ perceptions of their primary role-relevant responsibilities are consistent with agency theory and extensive mediational activism, while perceptions of value-add are more consistent with the theory of resource dependence and reflect the desire to leverage prior experiences. Finally, we provide evidence on a host of difficult judgments and decisions that ACMs oversee, and find that they sometimes use typical negotiation strategies such as contending and compromising, but rarely resort to offering concessions. Employing these strategies differs based on social identities, but regardless of their identities ACMs most commonly approach their oversight role in resolving difficult judgments and decisions by adopting a mediational activism perspective.

Keywords: Audit committee; Corporate governance; Mediational activism; Monitoring; Negotiation; Resource dependence; Social identity theory (search for similar items in EconPapers)
JEL-codes: A14 D9 G3 M42 (search for similar items in EconPapers)
Date: 2021
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:aosoci:v:93:y:2021:i:c:s0361368221000180

DOI: 10.1016/j.aos.2021.101242

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