Who Can Stand Up for Good Governance? How Received Respect enables Audit Committees to Avoid Earnings Management

This event is part of the Department of Strategy and International Business Research Seminar series.

Speaker: Professor Igor Filatotchev (Professor of Corporate Governance and Strategy & Vice-Dean, Kings College London; General Editor Journal of Management Studies)

Synopsis

We contribute to the governance literature as well as to the literature about respect by examining how respect affects the monitoring efficiency of corporate boards. By building on the attention-based view and introducing the concept of respect, we challenge conventional wisdom that audit committees’ (ACs’) monitoring activities necessarily lead to board action. We argue that board attention is limited and not necessarily concentrated on AC issues, but that larger proportions of respected board members on the AC will lead to increased board attention to AC issues. This attention in turn is a means for the AC to get its voice heard, induce board action, and consequently, be effective. We also show that the effectiveness of such respect towards AC members is moderated by cultural dimensions, namely, power distance and cultural assertiveness. Using a sample of 392 European firms, we find support for our arguments.

About the speaker

Igor Filatotchev is Professor of Corporate Governance and Strategy and Vice Dean (International Relations) at King’s Business School, University of London.  He is currently a General Editor of Journal of Management Studies. He earned his PhD in Economics from the Institute of World Economy and International Relations in Moscow.

Professor Filatotchev has published extensively in the fields of corporate governance and strategy in leading academic journals such as Academy of Management Journal, Strategic Management Journal, Organization Science, Journal of Management, Journal of International Business Studies, Journal of Corporate Finance, Journal of Management Studies and Journal of Business Venturing. His research interests focus on corporate governance effects on internationalization strategy, entrepreneurship development and strategic decisions. His current research includes the analysis of resource and strategy roles of corporate governance; the corporate governance life-cycle; and a knowledge-based view on governance development in entrepreneurial firms and IPOs. These projects are supported by various national and international donors, including ESRC, the Department of Trade and Industry, Leverhulme Trust, the Institute of Chartered Accountants of England and Wales and the European Commission.