The Austrian Way: Director Conduct in the Context of Legal and Cultural Frameworks of Corporate Governance

Abstract

In recent years there has been considerable discussion of and some movement towards, harmonisation of governance structures and processes between the EU and North America in particular. Multilateral organisations (i.e. World Bank), the USA's Sarbanes Oxley and the expansion of the EU in 2004 have all provided added impetus for a broader focus on harmonisation or convergence. But is convergence possible? Can any ‘one size fits all’ approach to governance be consistent with divergent national legal and cultural systems? A qualitative study of Austrian company directors is used to investigate whether the recent development of a more open economy coupled with the global capital market is generating a convergent model of director conduct. It was apparent that a stakeholder approach, where stewardship theory best explains the processes to mediate director conduct, continues to best describe the Austrian way. This contrasts with ‘theory in use’ in Anglo-American practice which conforms to the tenets of Agency Theory. We conclude with a discussion of the implications for sustainability management.

Citation

Bickley, M. and Nowak, M. (2005), "The Austrian Way: Director Conduct in the Context of Legal and Cultural Frameworks of Corporate Governance", Lehman, C.R., Tinker, T., Merino, B. and Neimark, M. (Ed.) Corporate Governance: Does Any Size Fit? (Advances in Public Interest Accounting, Vol. 11), Emerald Group Publishing Limited, Leeds, pp. 145-165. https://doi.org/10.1016/S1041-7060(05)11007-4