Reaffirming the importance of managerial discretion in corporate governance: A comment on Andersen (2017)

Moustafa Haj Youssef, Da Teng

Research output: Contribution to journalArticle

4 Citations (Scopus)
63 Downloads (Pure)

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.

Original languageEnglish
Pages (from-to)240-254
Number of pages15
JournalCorporate Governance
Volume19
Issue number2
Early online date22 Aug 2018
DOIs
Publication statusPublished - 1 Apr 2019

Bibliographical note

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Keywords

  • Corporate governance
  • Institutional antecedents
  • Managerial discretion
  • Organizational performance

ASJC Scopus subject areas

  • Business, Management and Accounting (miscellaneous)

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