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PurposeThis paper aims to demonstrate the efforts of Hay Youssef and Tang (2019) to reaffirm the importance of managerial discretion is unsuccessful.Design/methodology/approachTheoretical frameworks from traditional and recent literature on the concept of managerial discretion are related to corporate governance scholarship.FindingsThere are in fact no studies on managerial discretion based on explicit theoretical and empirical definitions and thus no studies published which have measured the degrees of managers' discretion. The conclusion is that the inability to define the notion of managerial discretion is tantamount to the inability to research it.Practical implicationsResearch on managerial discretion does not provide any advice to owners and directors of boards on granting top executives a high or a low degree of discretion.Originality/valueThis paper reaffirms the conclusion of Andersen (2017) that corporate governance scholarship will improve if it abandons the concept of managerial discretion.

PurposeSome scholars have claimed that CEOs make decisions, while boards of directors control these decisions by applying the concepts of decision management and decision control. These concepts were suggested more than 30 years ago and are still applied in corporate governance research. They are now challenged on the basis of scholarship on corporate governance and management.Design/methodology/approachCorporate governance addresses the authority and responsibility that boards of directors and executives have. Management theory addresses planning and control in corporations.FindingsThe relationship between the owners (the boards of directors) and the top managers is hierarchical. This paper concludes that owners or boards of directors make decisions on main and strategic goals. Decisions cannot be controlled, but the implementation and outcomes of plans can. The latter is managers' responsibility. The terms "decision management" and "decision control" are undefined and do not describe what takes place in organizations.Research limitations/implicationsThis paper does not contain any new empirical data.Originality/valueManagement theory offers clear definitions of decisions, decision-making and control. The concepts of decision management (initiation and implementation) and decision control (ratification and monitoring) neither properly describe who makes major and strategic decisions nor how and who controls the consequences of these decisions.

PurposeThis paper aims to assess the concept of managerial discretion with respect to its theoretical and empirical usefulness for corporate governance research.Design/methodology/approachThis paper scrutinises applied theoretical claims, definitions and methods, as well as a number of empirical studies on managerial discretion.FindingsTo date, no empirical definition of the concept has been presented and no measurement has been developed and tested for reliability and validity that contains all three factors of the managerial discretion concept, as proposed by Hambrick and Finkelstein (1987).Practical implicationsResearch on managerial discretion does not provide owners and directors of boards with any advice on granting top managers a high or low degree of discretion.Originality/valueThis paper concludes that corporate governance scholarship will improve if it abandons the concept of managerial discretion.

Purpose– This paper aims to show how organisation theory can be used to understand the controversy between the shareholder and the stakeholder perspectives. Rationalistic and open system theories may enhance research on corporate governance by offering well-defined concepts and by specifying core relationships.Design/methodology/approach– This paper applies descriptions of the two perspectives in organisation theory as a "method" for illustrating how they are linked to and support the shareholder versus the stakeholder perspectives.Findings– The controversy stems from the fact that the shareholder and the stakeholder perspectives address different relationships. The shareholder perspective captures two relationships that accord with rationalistic organisation theory: shareholders are managing the managers and the organisation, and managers are managing the corporation on behalf of the owners. The stakeholder perspective focuses on three relationships that are not concordant with system theory: managers are managing the shareholders (i.e. the symbolic management of stockholders), managers are managing the corporation (i.e. general management theory) and managers are managing the stakeholders.Research limitations/implications– Organisation theory provides suggestions for more fruitful definitions of the often-used concepts of direction, control, administration and influence. These terms may be substituted with the well-defined concepts of management, power and control.Practical implications– Proponents of organisation theory find it theoretically difficult to deal with the topic of corporate governance, if they do at all. When they do, they do it only perfunctorily.Originality/value– Organisation theory may strengthen research on corporate governance if we insist on both theoretical clarifications of major relationships and on the use of more strictly defined concepts.