Reaffirming the importance of managerial discretion in corporate governance: a comment on Andersen (2017)
ISSN: 1472-0701
Article publication date: 10 October 2018
Issue publication date: 3 April 2019
Abstract
Purpose
The purpose of this study is to refute the work of Andersen (2017) by suggesting a different theoretical view and to argue that the concept of managerial discretion is one of the core dimensions that cannot be discarded when studying corporate governance.
Design/methodology/approach
This paper uses theoretical frameworks from recent literature, definitions and empirical studies on the concept of managerial discretion and corporate governance.
Findings
Several studies have empirically tested and measured the concept of managerial discretion, some have provided validity and reliability of the concept and others have showed the direct impact of discretion on firm performance.
Practical implications
Research on managerial discretion provides owners and board of directors a clear advice on how much discretion can be granted to top executives by taking into consideration the different dimensions of the external and internal environment.
Originality/value
This paper concludes that corporate governance research will not improve if it abandons the concept of managerial discretion.
Keywords
Citation
Haj Youssef, M.S. and Teng, D. (2019), "Reaffirming the importance of managerial discretion in corporate governance: a comment on Andersen (2017)", Corporate Governance, Vol. 19 No. 2, pp. 240-254. https://doi.org/10.1108/CG-05-2018-0172
Publisher
:Emerald Publishing Limited
Copyright © 2018, Emerald Publishing Limited