Constructing an accountability regime for proxy advisors: an organizational roles perspective
Abstract
Purpose
This study investigates how the interrelated elements of organizational roles – activities, motives, resources and relationships – are mobilized to construct a code of conduct for the proxy advisory (PA) industry in Europe.
Design/methodology/approach
This qualitative study uses archival documents from three consecutive regulatory consultations and 16 interviews with key stakeholders. It analyzes how different stakeholder groups (i.e. PA firms, investors, issuers and the regulator) perceive and mobilize the elements of PA firms’ role to construct the accountability regime’s boundaries (accountability problem and action, and users and providers of accounts).
Findings
This study shows how PA firms, investors, issuers and the regulator refer to the perceived motives behind PA firms’ activities to construct an accountability problem. The regulator accepted the motives of an information intermediary for PA firms’ role and required PA firms to develop a corresponding accountability action: a code of conduct. PA firms involved in developing the code of conduct formalized who is accountable to whom by aligning this accepted motive with their activities, relationships, and resources into a common role.
Originality/value
The study highlights how aligning role elements to reflect PA firms’ common roles enables the construction of an accountability regime that stakeholders accept as a means of regulation. Analyzing the role elements offers insights into the development and functioning of accountability regimes that rely on self-regulation. We also highlight the role of smaller regional firms in helping shape transnational accountability regimes.
Keywords
Acknowledgements
Accepted by Lee Parker. This paper is based on the second chapter of Damien Lambert’s Ph.D. dissertation at ESSEC Business School. Damien is greatly indebted to his co-supervisor, Marie-Laure Salles and Chrystelle Richard for their valuable guidance as well as Matthew Hall and Kalle Kraus for their support and comments on multiple versions of that paper. The authors acknowledge with thanks the valuable feedback from Lee Parker and two anonymous reviewers as well as Thomas Ahrens, Bruce Carruthers, Patricia Charléty, Wai Fong Chua, David Cooper, Neil Fligstein, Yves Gendron, Matthew Hall, Kalle Kraus, Bernard Leca, Afshin Mehrpouya, Martin Messner, Yuval Millo, Sabine Montagne, Jan Mouritsen, Hélène Rainelli-Weiss, Keith Robson and participants in the EAA Doctoral Colloquium (2015), the Conference Internationale de Gouvernance (CIG) at IAE Montpellier (2016), the FRASOP-3 workshop at the London School of Economics (2016) and research workshops in the Department of Accounting at Monash Business School (2019 and 2020).
Citation
Lambert, D. and Wiegmann, L. (2024), "Constructing an accountability regime for proxy advisors: an organizational roles perspective", Accounting, Auditing & Accountability Journal, Vol. ahead-of-print No. ahead-of-print. https://doi.org/10.1108/AAAJ-02-2022-5686
Publisher
:Emerald Publishing Limited
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