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Selective compliance with the corporate governance code in Mauritius: Is legitimacy theory at work?


Soobaroyen, T and Mahadeo, JD, Selective compliance with the corporate governance code in Mauritius: Is legitimacy theory at work?, Corporate governance in less developed and emerging economies, Emerald Group Publishing Limited, M Tsamenyi and S Uddin (ed), United Kingdom, pp. 239-272. ISBN 978-1-84855-252-4 (2008) [Research Book Chapter]

Copyright Statement

Copyright 2008 Emerald Group Publishing Limited

DOI: doi:10.1016/S1479-3563%2808%2908009-2


Purpose of this paper: This study investigates compliance with the corporate governance code in an African developing economy (Mauritius).

Methodology/approach: We examine the annual reports of 41 listed companies to assess the extent of compliance with the code and to analyze the wording of compliance statements. We also carry out in-depth semi-structured interviews with selected company directors to understand the reasons for compliance (or non-compliance).

Findings: Initial findings indicate a reasonable level of compliance with the more visible requirements of the code but noteworthy non-compliance also emerges, particularly in relation to the low number of company boards being chaired by independent directors, to uncertainties on the actual operation of board committees, and to the widespread non-disclosure of directors’ remuneration. Furthermore, compliance statements were found to be vague, ambiguous, or even inconsistent with the extent of compliance disclosed in the reports. We believe these are indications that many of the companies are adhering selectively with the code to project an image of symbolic compliance. Our in-depth follow-up interviews with directors largely confirm this behaviour of selective compliance.

Research implications: We suggest that the pursuit of legitimacy as an operational resource – rather than efficiency-led rationales – emerges as a potential theoretical explanation for the adoption of the corporate governance code in Mauritius.

Originality /value of paper: We bring evidence on how the corporate governance code is being understood and rationalized in a developing economy. We rely on a combination of annual report disclosures, compliance statements, and interview data to investigate corporate governance compliance.

Item Details

Item Type:Research Book Chapter
Keywords:corporate governance, code of corporate governance, legitimacy theory, emerging nation
Research Division:Commerce, Management, Tourism and Services
Research Group:Accounting, auditing and accountability
Research Field:Sustainability accounting and reporting
Objective Division:Economic Framework
Objective Group:Management and productivity
Objective Field:Management
UTAS Author:Mahadeo, JD (Dr Brinda Mahadeo)
ID Code:133112
Year Published:2008
Deposited By:Management
Deposited On:2019-06-12
Last Modified:2019-07-10

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