Abstract
We consider how firms develop internal corporate governance policies based on external nation-wide standards. Flexibility in interpreting external standards allows firms to develop internal regulations focused on governance procedures that are only loosely coupled with expected governance outcomes. Our results demonstrate that firms tend to adopt less restrictive policies than what is recommended by the national standard and are more willing to adopt policies regulating governance procedures than policies regulating governance decisions. We also argue that the process of translating external standards into internal guidelines is affected by firm-specific characteristics and explore factors that determine to what extent firms switch the focus of internal policies from regulating governance decisions to regulating governance procedures.
Original language | English |
---|---|
Pages (from-to) | 499-532 |
Number of pages | 34 |
Journal | Journal of Management and Governance |
Volume | 21 |
Issue number | 2 |
DOIs | |
Publication status | Published - 2017 |
Keywords
- Corporate governance
- Loose coupling
- Self-regulation
- Symbolic compliance
- Translation