Ceremonies of Governance: Perspectives on the Role of the Audit Committee

Laura Spira ()

Journal of Management & Governance, 1999, vol. 3, issue 3, 260 pages

Abstract: The widespread establishment of auditcommittees in large UK companies cannot be explainedby evidence of their effectiveness as a mechanism ofcorporate governance, since such evidence is sparse.In this paper, participants' accounts of auditcommittee activity are explored, using conceptsdeveloped in actor-network theory. The paper suggeststhat a possible explanation for the popularity ofaudit committees may be found in their ceremonialfunction, which, through a comforting display ofconcern for corporate governance standards, validatescompany legitimacy and enables access to resources forsurvival and growth. The paper briefly reviews the literature on auditcommittee effectiveness, noting its limitations, anddescribes a qualitative study of audit committeeactivity through the perceptions of participants –audit committee chairs and members, finance directors,internal and external auditors. The actor-networkconcept of `translation' is used to frame theseperceptions, highlighting the ceremonial components ofaudit committee meetings and the performance ofquestioning. It is argued that, aside from anysubstantive audit committee activity, this ceremonialperformance plays an important part in offeringcomfort and reassurance to investors and lenders. Copyright Kluwer Academic Publishers 1999

Keywords: actor-network theory; audit committee; ceremony; meetings; performance (search for similar items in EconPapers)
Date: 1999
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Citations: View citations in EconPapers (21)

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DOI: 10.1023/A:1009926203363

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