Risk and Complexity of the Interaction of the Board of Directors and Corporate Governance: Examination and Analysis Using Grounded Theory

Subject Areas :

Salman Cheraghi Badi, ¹ , , Meysam Arabzadeh ² , Hasan Ghodrati Ghazaani, ³ , Hossein Jabbary ⁴ , Mostafa Ezadpour ⁵

1 - Ph.D. Student, Department of Accounting, Kashan Branch, Islamic Azad University, Kashan, Iran
2 - Assistant Professor, Department of Accounting, Kashan Branch, Islamic Azad University, Kashan, Iran
3 - Assistant Professor, Department of Accounting, Kashan Branch, Islamic Azad University, Kashan, Iran
4 - Assistant Professor, Department of Accounting, Kashan Branch, Islamic Azad University, Kashan, Iran
5 - Assistant Professor, Department of Accounting, Faculty of Management, University of Qom, Qom, Iran

Received: 2022-11-18 Accepted : 2023-03-01 Published : 2023-05-22

Keywords: Corporate Governance, Risk, Grounded Theory, interaction of the board of directors, reports of the board of directors,

Abstract :

The purpose of the current study was to devise a model based on risk and complexity of the interaction of board of directors as a major element of corporate governance using grounded theory. A pilot sample was examined to validate the field research. Content derived from on-field surveys and interviews were extracted and hence coded, which initially resulted in 96 sources. Ultimately, 76 codes and 142 sources were extracted from the contents. The course of the board of directors can be categorized in three separate stages of pre-distribution, individual processing and group processing. The reports offered to the board of directors were categorized as for information, for report and for discussion and review. The concept of “Allocation of effort” was presented with labels of “for information”, “for report”, “for discussion and review” and “temporary committees”. The board of directors was objectified as a group's understanding of risk and the organization's understanding of risk. “Allocation of effort” was a definitive representation of non-compliance between the members of the board of directors or in relation to understanding their role or the risk caused thereby. The temporary committees are one of the main components in the monitoring and decision-making processes of the board of directors and should be transparent enough for the stakeholders to review. The disclosure of these committees should include the disclosure of activities, authorities and actors involved in each committee. As such devising and implementing policies aimed at officially unveiling temporary committees,.

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