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Behaviour and rationality in corporate governance

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  • Oliver Marnet

Abstract

The agency view of corporate governance requires effective monitors and gatekeepers to align the interests of the agent with those of the principal. One common denominator in recent corporate debacles appears to be the collective failure of gatekeepers and monitors. This paper suggests that conventional proposals to reform corporate governance through legislation, codes of best practice, and the like, are necessary, but underestimate the pressures from conflicts of interest and bias which reputation intermediaries face in their interaction with colleagues and clients. The aim of this paper is to integrate various strands of the literature on corporate governance, cognitive research and behavioural economics to shed light on questions regarding the independence of boards of directors and external auditors.

Suggested Citation

  • Oliver Marnet, 2008. "Behaviour and rationality in corporate governance," International Journal of Behavioural Accounting and Finance, Inderscience Enterprises Ltd, vol. 1(1), pages 4-22.
    • Handle: RePEc:ids:ijbeaf:v:1:y:2008:i:1:p:4-22
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    Citations

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    Cited by:

    1. Gérard Charreaux, 2009. "Droit et gouvernance:l’apport du courant comportemental," Working Papers CREGO 1091001, Université de Bourgogne - CREGO EA7317 Centre de recherches en gestion des organisations.
    2. Gérard Charreaux, 2011. "Quelle théorie pour la gouvernance?De la gouvernance actionnariale à la gouvernance cognitive et comportementale," Working Papers CREGO 1110402, Université de Bourgogne - CREGO EA7317 Centre de recherches en gestion des organisations.
    3. Guillaume Plaisance, 2023. "Accountability in French non-profit organizations: between paradox and complexity," Post-Print hal-04430976, HAL.
    4. P. Krishna Prasanna & Anish S. Menon, 2012. "Corporate governance and stock market liquidity in India," International Journal of Behavioural Accounting and Finance, Inderscience Enterprises Ltd, vol. 3(1/2), pages 24-45.
    5. Hoeppner Sven & Kirchner Christian, 2016. "Ex ante versus Ex post Governance: A Behavioral Perspective," Review of Law & Economics, De Gruyter, vol. 12(2), pages 227-259, July.
    6. Dusica STEVCEVSKA SRBINOSKA, 2022. "Audit modifications in emerging markets: The Macedonian Stock Exchange," Romanian Journal of Economics, Institute of National Economy, vol. 55(2(64)), pages 43-69, December.
    7. Horan Aidan & Mulreany Michael, 2020. "Corporate governance in the public sector: Reflections on experience in Ireland," Administration, Sciendo, vol. 68(4), pages 121-144, December.
    8. Saes, Beatriz Macchione & Muradian, Roldan, 2021. "What misguides environmental risk perceptions in corporations? Explaining the failure of Vale to prevent the two largest mining disasters in Brazil," Resources Policy, Elsevier, vol. 72(C).
    9. Anastasia Stepanova & Anastasia Suraeva, 2019. "An Overconfident CEO VS A Rational Board: The Tale About Bank Risk-Taking," HSE Working papers WP BRP 78/FE/2019, National Research University Higher School of Economics.
    10. Michel P. Guillemin, 2021. "New Avenues for Prevention of Work-Related Diseases Linked to Psychosocial Risks," IJERPH, MDPI, vol. 18(21), pages 1-12, October.
    11. Abdelsalam, Omneya & Dimitropoulos, Panagiotis & Elnahass, Marwa & Leventis, Stergios, 2016. "Earnings management behaviors under different monitoring mechanisms: The case of Islamic and conventional banks," Journal of Economic Behavior & Organization, Elsevier, vol. 132(S), pages 155-173.
    12. S. Morteza Ghayour B. & Meysam Doaei, 2012. "A Dialectic Model of Development of Stakeholders¡¯ Theory and Corporate Governance: from Hume Utilitarianism to Aristotelian Virtue Ethics," International Journal of Financial Research, International Journal of Financial Research, Sciedu Press, vol. 3(2), pages 96-104, April.
    13. Michel Guillemin & Robin Nicholas, 2022. "Core Values at Work—Essential Elements of a Healthy Workplace," IJERPH, MDPI, vol. 19(19), pages 1-17, September.

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