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Do ‘Good Governance’ Codes Enhance Financial Accountability? Evidence from Managerial Pay in Dutch Charities
Author(s) -
Perego Paolo,
Verbeeten Frank
Publication year - 2015
Publication title -
financial accountability and management
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.661
H-Index - 44
eISSN - 1468-0408
pISSN - 0267-4424
DOI - 10.1111/faam.12059
Subject(s) - accountability , corporate governance , accounting , business , compensation (psychology) , executive compensation , good governance , finance , public relations , political science , psychology , law , psychoanalysis
This paper examines the initial impact of a ‘good governance’ code for charitable organisations that was promulgated in the Netherlands in 2005. Data are gathered from publicly available annual reports of 138 charities in the post‐implementation phase of the code (2005–2008). We first examine whether the code altered charities’ governance structures. Next, we investigate managerial pay as a key aspect of discharging financial accountability because prior literature focused on ‘excessive’ compensation. The findings indicate that a strengthened governance structure positively affects the likelihood of disclosing information concerning managerial pay, as well as mitigating managerial pay level.