Auditors' Professional Identities: Review And Future Directions
In: Accounting Perspectives, Forthcoming
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In: Accounting Perspectives, Forthcoming
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In: Forthcoming at AUDITING: A Journal of Practice & Theory
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Working paper
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In: European Accounting Review (Forthcoming)
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Working paper
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In: YCPAC-D-22-00170
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In: Sociedade, contabilidade e gestão, Band 17, Heft 2, S. 1-28
ISSN: 1982-7342
This study provides a better understanding of the dynamics of knowledge and expertise in the context of public companies' compensation committees (CCs), through a focus on CC members' cognitive limitations. Drawing on semi-structured interviews, we mobilize the concepts of reflexive thinking and functional stupidity (Alvesson and Spicer 2012) to document and analyze CC members' difficulties and/or unwillingness "to use cognitive and reflective capacities in anything other than narrow and circumspect ways" (Alvesson and Spicer, 2012: 1201). Overall, our findings indicate that CC members, although being firmly committed to knowledge development and problem solving, are disinclined to mobilize three key aspects of cognitive capacity (i.e., reflexivity, meaningful justification and substantive reasoning) in the design of remuneration policies. Our study also shows that these cognitive limitations are fuelled by a multidimensional exercise of power, which we conceive of as a form of "stupidity management" (Alvesson and Spicer 2012). The latter aims to limit CC members' meaningful communicative action by constraining disruptive thinking and preventing critical issues from impacting committees' agenda and deliberations – all of this in the name of aspirational yet superficial forms of decision-making leadership in the boardroom. Our analysis also highlights the central role of compensation consultants as "stupidity managers", involved in the orchestration of the constraining of committee members' mind. Significant implications of these findings for research and policy-making are discussed.
In: Organization studies: an international multidisciplinary journal devoted to the study of organizations, organizing, and the organized in and between societies, Band 33, Heft 3, S. 389-421
ISSN: 1741-3044
Drawing on Mary Douglas's cultural theory, our research analyzes the cultural schemes or biases mobilized by compensation committee (CC) members, in the context of public companies, when making sense of their committee's work. Relying on semi-structured interviews mostly conducted with CC members in Canada, our analysis brings to the fore the production of moral and rational comfort within the boundaries of the individualistic and hierarchical culture. Under an individualistic bias, the compensation market is seen as natural, providing conditions of possibility that serve to establish fair compensation through the creation and enforcement of contracts. Under a hierarchic bias which emphasizes principles of objectivity and measurability, members of CCs tend to conceive the design of compensation policies as an act of expertise, relying extensively on consultants and measurement techniques to determine acceptable reward boundaries. Not only does our paper contribute to corporate governance literature by providing insight into a central aspect of CCs, that is to say CC members' ways of thinking and doing, but the juxtaposition of cultural theory with CC empirics provides us with the opportunity to reflect and theorize on the issue of cultural change.