Series editor(s): Professor Mathew Tsamenyi and Prof. Shahzad Uddin
Subject Area: Accounting and Finance
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|Title:||Selective compliance with the corporate governance code in Mauritius: Is legitimacy theory at work?|
|Author(s):||Teerooven Soobaroyen, Jyoti Devi Mahadeo|
|Volume:||8 Editor(s): Mathew Tsamenyi, Shahzad Uddin ISBN: 978-1-84855-252-4 eISBN: 978-1-84855-253-1|
|Citation:||Teerooven Soobaroyen, Jyoti Devi Mahadeo (2008), Selective compliance with the corporate governance code in Mauritius: Is legitimacy theory at work?, in Mathew Tsamenyi, Shahzad Uddin (ed.) Corporate Governance in Less Developed and Emerging Economies (Research in Accounting in Emerging Economies, Volume 8), Emerald Group Publishing Limited, pp.239-272|
|DOI:||10.1016/S1479-3563(08)08009-2 (Permanent URL)|
|Publisher:||Emerald Group Publishing Limited|
|Article type:||Chapter Item|
Purpose of this paper – This study investigates compliance with the corporate governance code in an African developing economy (Mauritius).
Methodology/approach – We examine the annual reports of 41 listed companies to assess the extent of compliance with the code and to analyze the wording of compliance statements. We also carry out in-depth semi-structured interviews with selected company directors to understand the reasons for compliance (or non-compliance).
Findings – Initial findings indicate a reasonable level of compliance with the more visible requirements of the code but noteworthy non-compliance also emerges, particularly in relation to the low number of company boards being chaired by independent directors, to uncertainties on the actual operation of board committees, and to the widespread non-disclosure of directors’ remuneration. Furthermore, compliance statements were found to be vague, ambiguous, or even inconsistent with the extent of compliance disclosed in the reports. We believe these are indications that many of the companies are adhering selectively with the code to project an image of symbolic compliance. Our in-depth follow-up interviews with directors largely confirm this behaviour of selective compliance.
Research implications – We suggest that the pursuit of legitimacy as an operational resource – rather than efficiency-led rationales – emerges as a potential theoretical explanation for the adoption of the corporate governance code in Mauritius.
Originality /value of paper – We bring evidence on how the corporate governance code is being understood and rationalized in a developing economy. We rely on a combination of annual report disclosures, compliance statements, and interview data to investigate corporate governance compliance.
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