The cultural grammar of governance: The UK Code of Corporate Governance, reflexivity, and the limits of ‘soft’ regulation

First Published October 19, 2015 Research Article

Authors

City University, UK, [email protected]
by this author
,
City University, UK and Cardiff Business School, UK, [email protected]
by this author
First Published Online: October 19, 2015

We identify limits of ‘reflexive governance’ by examining the UK Code of Corporate Governance that is celebrated for its ‘reflexivity’. By placing the historical genesis of the Code within its politico-economic context, it is shown how its scope and penetration is impeded by a shallow, ‘single loop’ of reflexivity. Legitimized by agency theory, the Code is infused by a ‘cultural grammar’ that perpetuates relations of shareholder primacy as it restricts accountability to narrow forms of information disclosure directed exclusively at shareholders. Engagement of a deeper, ‘double loop’ reflexivity allows account to be taken of the historical conditions and theoretical conceptions that shape practices and outcomes of corporate governance. Only then is it possible to disclose, challenge and reform narrow conceptions, boundaries and workings of ‘reflexive governance’.

Abbott, KW, Snidal, D (2000) Hard and soft law in international governance. International Organization 54(3): 421456.
Google Scholar | Crossref | ISI
Aglietta, M, Rebérioux, A (2005) Corporate Governance Adrift: A Critique of Shareholder Value. Cheltenham: Edward Elgar Publishing.
Google Scholar | Crossref
Ailon, G (2011) Mapping the cultural grammar of reflexivity: The case of the Enron scandal. Economy and Society 40(1): 141166.
Google Scholar | Crossref | ISI
Allen, WT (1992) Our schizophrenic conception of the business corporation. Cardozo Law Review 14(2): 261281.
Google Scholar
Arcot, S, Bruno, V (2006) In letter but not in spirit: An analysis of corporate governance in the UK. Available at: SSRN 819784.
Google Scholar
Argyris, C, Schön, DA (1978) Organizational Learning: A Theory of Action Perspective. Reading, MA: Addison-Wesley.
Google Scholar
Armour, J, Deakin, S, Konzelmann, SJ (2003) Shareholder primacy and the trajectory of UK corporate governance. British Journal of Industrial Relations 41(3): 531555.
Google Scholar | Crossref | ISI
Bastiat, F (1845) The Physiology of Plunder. Available at: http://fredericbastiat.com/The%20Physiology%20of%20Plunder.html.
Google Scholar
Berk, G, Schneiberg, M (2005) Varieties in capitalism, varieties of association: Collaborative learning in American industry, 1900 to 1925. Politics & Society 33(1): 4687.
Google Scholar | SAGE Journals | ISI
Berle, AA, Means, GC (2007 [1932]) The Modern Corporation and Private Property, revised edn. New Brunswick, NJ; London: Transaction.
Google Scholar
Biondi, Y, Canziani, A, Kirat, T (2007) The Firm as an Entity: Implications for Economics, Accounting and the Law. Abingdon: Routledge.
Google Scholar | Crossref
Blair, MM (1995) Ownership and Control: Rethinking Corporate Governance for the Twenty-First Century. Washington, DC: Brookings Institution Press.
Google Scholar
Boltanski, L, Chiapello, E (2007) The New Spirit of Capitalism. London: Verso.
Google Scholar
Bowden, S (2000) Corporate governance in a political climate: The impact of public policy regimes on corporate governance in the UK. In: Parkinson, JE, Gamble, A, Kelly, G (eds) The Political Economy of the Company. Oxford: Hart Publishing, 175194.
Google Scholar
Bratton, WW (1989) The ‘nexus of contracts’ corporation: A critical appraisal. Cornell Law Review 74(2): 407465.
Google Scholar
Cadbury, SA (2012) Speech by Sir Adrian Cadbury at the FRC’s 20th Anniversary of the Corporate Governance Code Event, 6 November. Available at: https://www.frc.org.uk/News-and-Events/FRC-Press/Press/2012/Speeches/Speech-by-Sir-Adrian-Cadbury-at-the-FRC-s-20th-Ann.aspx.
Google Scholar
Cankar, NK, Deakin, S, Simoneti, M (2010) The reflexive properties of corporate governance codes: The reception of the ‘comply-or-explain’ approach in Slovenia. Journal of Law and Society 37(3): 501525.
Google Scholar | Crossref | ISI
Chorev, N, Babb, S (2009) The crisis of neoliberalism and the future of international institutions: A comparison of the IMF and the WTO. Theory and Society 38(5): 459484.
Google Scholar | Crossref | ISI
Clift, B, Gamble, A, Harris, M (2000) The Labour Party and the company. In: Parkinson, JE, Gamble, A, Kelly, G (eds) The Political Economy of the Company. Oxford: Hart Publishing, 5182.
Google Scholar
Collison, D, Cross, S, Ferguson, J (2014) Financialization and company law: A study of the UK Company Law Review. Critical Perspectives on Accounting 25(1): 516.
Google Scholar | Crossref | ISI
Cousins, J, Mitchell, A, Sikka, P (1991) Towards Corporate Accountability: A Submission to the Cadbury Committee on Corporate Governance.
Google Scholar
Crouch, C (2011) The Strange Non-Death of Neo-Liberalism. Cambridge: Polity.
Google Scholar
Daily, CM, Johnson, JL (1997) Sources of CEO power and firm financial performance: A longitudinal assessment. Journal of Management 23(2): 97117.
Google Scholar | SAGE Journals | ISI
Daily, CM, Dalton, DR, Cannella, AA (2003) Corporate governance: Decades of dialogue and data. Academy of Management Review 28(3): 371382.
Google Scholar | Crossref | ISI
Davis, GF (2009) Managed by the Markets: How Finance Re-Shaped America. Oxford: Oxford University Press.
Google Scholar
De Schutter, O, Deakin, S (2003) Reflexive governance and the Dilemmas of social Regulation. European Law Review 28: 814.
Google Scholar
Deakin, S (2009) Reflexive governance and European company law. European Law Journal 15(2): 224245.
Google Scholar | Crossref | ISI
Deetz, S (1992) Democracy in an Age of Corporate Colonization: Developments in Communication and the Politics of Everyday Life. Albany, NY: SUNY Press.
Google Scholar
Duménil, G, Lévy, D (2001) Costs and benefits of neoliberalism. A class analysis. Review of International Political Economy 8(4): 578607.
Google Scholar | Crossref | ISI
Ezzamel, M, Reed, M (2008) Governance: A code of multiple colours. Human Relations 61(5): 597615.
Google Scholar | SAGE Journals | ISI
Ezzamel, M, Watson, R (1997) Wearing two hats: The conflicting control and management roles of non-executive directors. In: Keasey, K, Thompson, S, Wright, M (eds) Corporate Governance: Economic and Financial Issues: Economic and Financial Issues. Oxford: Oxford University Press, 5479.
Google Scholar
Ezzamel, M, Willmott, H, Worthington, F (2008) Manufacturing shareholder value: The role of accounting in organizational transformation. Accounting, Organizations and Society 33(2–3): 107140.
Google Scholar | Crossref | ISI
Garratt, B (forthcoming) Valuing corporate governance as a national leadership asset: Changing the leadership focus to behaviours and values rather than codes and compliance. Governance Directions Journal.
Google Scholar
Glynos, J, Klimecki, R, Willmott, H (forthcoming) Logics in policy and practice: A critical nodal analysis of the UK banking reform process. Critical Policy Studies.
Google Scholar | ISI
Goergen, M, Mallin, C, Mitleton-Kelly, E, Al-Hawamdeh, A, Chiu, IH (2010) Corporate Governance and Complexity Theory. Cheltenham: Edward Elgar Publishing.
Google Scholar | Crossref
Goodman, G (2003) Captain Bob and the Spooks. Guardian, 24 November. Available at: http://www.theguardian.com/media/2003/nov/24/mondaymediasection6.
Google Scholar
Gospel, H, Pendleton, A (2003) Finance, corporate governance and the management of labour: A conceptual and comparative analysis. British Journal of Industrial Relations 41(3): 557582.
Google Scholar | Crossref | ISI
Harvey, D (2009) A Brief History of Neoliberalism. New York: Oxford University Press.
Google Scholar
Henry, A (2008) Understanding Strategic Management. New York: Oxford University Press.
Google Scholar
Horn, L (2012) Corporate governance in crisis? The politics of EU corporate governance regulation. European Law Journal 18(1): 83107.
Google Scholar | Crossref | ISI
Ireland, P (2000) Defending the Rentier: Corporate theory and the reprivatization of the public company. In: Parkinson, JE, Gamble, A, Kelly, G (eds) The Political Economy of the Company. Oxford: Hart Publishing.
Google Scholar
Ireland, P (2005) Shareholder primacy and the distribution of wealth. The Modern Law Review 68(1): 4981.
Google Scholar | Crossref
Ireland, P (2010) Limited liability, shareholder rights and the problem of corporate irresponsibility. Cambridge Journal of Economics 34(5): 837856.
Google Scholar | Crossref | ISI
Jackson, G (2000) Comparative corporate governance: Sociological perspectives. In: Parkinson, JE, Gamble, A, Kelly, G (eds) The Political Economy of the Company. Oxford: Hart Publishing, 265288.
Google Scholar
Jensen, MC, Meckling, WH (1976) Theory of the firm: Managerial behavior, agency costs and ownership structure. Journal of Financial Economics 3(4): 305360.
Google Scholar | Crossref | ISI
Jones, I, Pollitt, M (2004) Understanding how issues in corporate governance develop: Cadbury Report to Higgs Review. Corporate Governance: An International Review 12(2): 162171.
Google Scholar | Crossref | ISI
Jones, M (1995) Whatever happened to the Corporate Report? Management Accounting 73: 5254.
Google Scholar
Jones, V, Pierce, C (2013) Corporate Governance in the United Kingdom. Orpington: Global Governance Services.
Google Scholar
Jordan, C (2013) Cadbury twenty years on. Villanova Law Review 58(1): 124.
Google Scholar
Keay, A (2014) Comply or explain in corporate governance codes: In need of greater regulatory oversight? Legal Studies 34(2): 279304.
Google Scholar | Crossref | ISI
Khurana, R (2007) From Higher Aims to Hired Hands: The Social Transformation of American Business Schools and the Unfulfilled Promise of Management as a Profession. Princeton, NJ: Princeton University Press.
Google Scholar | Crossref
Larsson Olaison, U (2014) Convergence of national corporate governance systems: Localizing and fitting the transplants. PhD thesis, Linnaeus University. Available at: http://www.diva-portal.org/smash/get/diva2:753490/FULLTEXT01.pdf.
Google Scholar
Lazonick, W, O’Sullivan, M (2000) Maximizing shareholder value: A new ideology for corporate governance. Economy and Society 29(1): 1335.
Google Scholar | Crossref | ISI
Lounsbury, M, Hirsch, P (2010) Markets on Trial: The Economic Sociology of the US Financial Crisis. Bingley: Emerald Group Publishing.
Google Scholar
Morgan, G (2008) Market formation and governance in international financial markets: The case of OTC derivatives. Human Relations 61(5): 637660.
Google Scholar | SAGE Journals | ISI
Parkinson, J (2000) Evolution and policy in company law: The non-executive director. In: Parkinson, JE, Gamble, A, Kelly, G (eds) The Political Economy of the Company. Oxford: Hart Publishing, 233263.
Google Scholar
Parkinson, J, Kelly, G (1999) The combined code on corporate governance. The Political Quarterly 70(1): 101107.
Google Scholar | Crossref | ISI
Perrow, C (2002) Organizing America: Wealth, Power, and the Origins of Corporate Capitalism. Princeton, NJ: Princeton University Press.
Google Scholar
Piketty, T (2014) Capital in the Twenty-first Century. Cambridge, MA: Harvard University Press.
Google Scholar | Crossref
Pye, A (2001) Corporate boards, investors and their relationships: Accounts of accountability and corporate governing in action. Corporate Governance: An International Review 9(3): 186195.
Google Scholar | Crossref | ISI
Pye, A (2002) The changing power of ‘explanations’: Directors, academics and their sensemaking from 1989 to 2000. Journal of Management Studies 39(7): 907925.
Google Scholar | Crossref | ISI
Pye, A (2013) Boards and governance: 25 years of qualitative research with directors of FTSE companies. In: Wright, M, Siegel, DS, Keasey, K, Filatotchev, I (eds) The Oxford Handbook of Corporate Governance. Oxford: Oxford University Press, 135162.
Google Scholar | Crossref
Robé, JP (2011) The legal structure of the firm. Accounting, Economics, and Law 1: 186.
Google Scholar
Roberts, J (2012) Between the letter and the spirit: Defensive and extensive modes of compliance with the UK Code of Corporate Governance. In: Clarke, T, Branson, D (eds) The SAGE Handbook of Corporate Governance. London: SAGE, 196217.
Google Scholar | Crossref
Roberts, J, McNulty, T, Stiles, P (2005) Beyond agency conceptions of the work of the non-executive director: Creating accountability in the boardroom. British Journal of Management 16(suppl. 1): S5S26.
Google Scholar | Crossref | ISI
Scott, C (2008) Reflexive governance, meta-regulation and corporate social responsibility: The ‘Heineken effect’. In: Boeger, N, Murray, R, Villiers, C (eds) Perspectives on Corporate Social Responsibility. Cheltenham: Edward Elgar Publishing, 170185.
Google Scholar | Crossref
Spira, LF, Slinn, J (2013) The Cadbury Committee: A History. Oxford: Oxford University Press.
Google Scholar | Crossref
Streeck, W, Schmitter, PC (1985) Private Interest Government: Beyond Market and State. London: SAGE.
Google Scholar
Thompson, GF (2012) The Constitutionalization of the Global Corporate Sphere? Oxford: Oxford University Press.
Google Scholar | Crossref
Tosey, P, Visser, M, Saunders, MN (2012) The origins and conceptualizations of ‘triple-loop’ learning: A critical review. Management Learning 43(3): 291307.
Google Scholar | SAGE Journals | ISI
Tsuk, D (2003) Corporations without labor: The politics of progressive corporate law. University of Pennsylvania Law Review 151(6): 18611912.
Google Scholar | Crossref | ISI
Van Apeldoorn, B, Nölke, A, Overbeek, H (2007) The Transnational Politics of Corporate Governance Regulation. New York: Routledge.
Google Scholar
Veldman, J, Willmott, H (2013) What is the corporation and why does it matter? [email protected]@gement 16: 605620.
Google Scholar | Crossref
Voss, J, Bornemann, B (2011) The politics of reflexive governance: Challenges for designing adaptive management and transition management. Ecology and Society 16(2): 9.
Google Scholar | Crossref | ISI
Voss, J, Kemp, R (2006) Sustainability and reflexive governance: Introduction. In: Voss, J, Bauknecht, D, Kemp, R (eds) Reflexive Governance for Sustainable Development. Cheltenham: Edward Elgar Publishing, 330.
Google Scholar
Zingales, L (2000) In search of new foundations. The Journal of Finance 55(4): 16231653.
Google Scholar | Crossref | ISI

Access content

To read the fulltext, please use one of the options below to sign in or purchase access.
  • Access Options

    My Account

    Welcome
    You do not have access to this content.

    Chinese Institutions / 中国用户

    Click the button below for the full-text content

    请点击以下获取该全文

    Institutional Login

    Purchase Content

    24 hours online access to download content

    Added to Cart

    Cart is full

    There is currently no price available for this item in your region.

    Research off-campus without worrying about access issues. Find out about Lean Library here


Purchase

HUM-article-ppv for GBP29.00
HUM-article-ppv for $37.50
Single Issue 24 hour E-access for GBP274.41
Single Issue 24 hour E-access for $331.88