A principles-based Anglo governance system is not a science but an art

Young, Suzanne and Thyil, Vijaya 2008, A principles-based Anglo governance system is not a science but an art, Corporate ownership and control, vol. 6, no. 1, Fall, pp. 127-137.


Title A principles-based Anglo governance system is not a science but an art
Author(s) Young, Suzanne
Thyil, Vijaya
Journal name Corporate ownership and control
Volume number 6
Issue number 1
Season Fall
Start page 127
End page 137
Publisher Virtus Interpress
Place of publication Sumy, Ukraine
Publication date 2008
ISSN 1727-9232
1810-3057
Keyword(s) corporate governance
Australia
regulation
principles
Summary Anglo governance systems rely of a number of controls to align shareholder and boards of director’s interests. In general they are referred to as market control, regulatory control, and political and cultural control. Agency theory proposes that these control mechanisms are necessary as human nature is such that directors and managers act in a self-interested and boundedly rational manner in decision-making that can result in sub optimality. Notwithstanding that each country within the Anglo system accepts such controls are necessary they have their own foci and priorities, being a product of their own system’s characteristics. This paper through interviewing a number of Australian business executives adds to the academic literature by providing evidence from the field of the important characteristics of the Australian governance system, the drivers of change and the effectiveness of the principles-based approach. It argues that debate needs to move beyond the principles versus rules approach to look at how firms can be provided with more guidance in operationalising some of the principles that appear to be key to governance effectiveness. It concludes that there is a need for a holistic model of governance that is broader than that focusing on the control/legalistic approach; that top management is important in setting and driving the in-firm governance agenda; that the public needs to be informed and educated about governance and its importance; and that disclosure still requires an improvement in quality.
Language eng
Field of Research 150199 Accounting, Auditing and Accountability not elsewhere classified
Socio Economic Objective 910199 Macroeconomics not elsewhere classified
HERDC Research category C1 Refereed article in a scholarly journal
HERDC collection year 2009
Copyright notice ©2008, Virtus Interpress
Persistent URL http://hdl.handle.net/10536/DRO/DU:30019746

Document type: Journal Article
Collection: Deakin Graduate School of Business
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