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Why the acceptance of voluntary codes on corporate Governance by listed Firms is so rapid?: A theoretical explanation

Journal Article


Abstract


  • Implementation of principles of the Codes on Corporate Governance (CCG) is aimed at minimizing

    agency conflicts and corporate governance problems in the listed firms. It is, however, observed that

    such conflicts and problems occur frequently despite the rapid implementation of the CCG by listed

    firms. We developed a theoretical framework to understand why do firms accept and implement the

    voluntary CCG principles and what type of behaviours could be expected from top management. We

    argue that ccorporations implement the principles and provisions of the voluntary CCG due to (a) their

    compliance with societal norms and ethics,(b)coercive isomorphic behavior of managers, (c) the need

    for basic integration and adaptive and mimetic behavior of managers, (d) specific needs of

    corporations, and (e).strategic vs. self- focused behavior of CEOs and non-executive directors (NEDs).

Publication Date


  • 2012

Citation


  • Gunathilake, W. & Chandrakumara, A. (2012). Why the acceptance of voluntary codes on corporate Governance by listed Firms is so rapid?: A theoretical explanation. Corporate Ownership and Control, 9 (3), 186-194.

Scopus Eid


  • 2-s2.0-84912064004

Has Global Citation Frequency


Number Of Pages


  • 8

Start Page


  • 186

End Page


  • 194

Volume


  • 9

Issue


  • 3

Place Of Publication


  • Ukraine

Abstract


  • Implementation of principles of the Codes on Corporate Governance (CCG) is aimed at minimizing

    agency conflicts and corporate governance problems in the listed firms. It is, however, observed that

    such conflicts and problems occur frequently despite the rapid implementation of the CCG by listed

    firms. We developed a theoretical framework to understand why do firms accept and implement the

    voluntary CCG principles and what type of behaviours could be expected from top management. We

    argue that ccorporations implement the principles and provisions of the voluntary CCG due to (a) their

    compliance with societal norms and ethics,(b)coercive isomorphic behavior of managers, (c) the need

    for basic integration and adaptive and mimetic behavior of managers, (d) specific needs of

    corporations, and (e).strategic vs. self- focused behavior of CEOs and non-executive directors (NEDs).

Publication Date


  • 2012

Citation


  • Gunathilake, W. & Chandrakumara, A. (2012). Why the acceptance of voluntary codes on corporate Governance by listed Firms is so rapid?: A theoretical explanation. Corporate Ownership and Control, 9 (3), 186-194.

Scopus Eid


  • 2-s2.0-84912064004

Has Global Citation Frequency


Number Of Pages


  • 8

Start Page


  • 186

End Page


  • 194

Volume


  • 9

Issue


  • 3

Place Of Publication


  • Ukraine