On the constitution of audit committee effectiveness

Abstract Pressures to perform and be effective are significantly influential within contemporary society, including within the realm of corporate boards of directors and audit committees. This paper adopts a social constructivist approach to better understand the process by which meanings regarding audit committee effectiveness are internally developed and sustained, within the small group of people who attend audit committee meetings. We conducted the investigation through interviews in three large Canadian public corporations listed on the Toronto Stock Exchange. Our analysis indicates that attendees’ reflective acts upon processes and activities surrounding audit committee meetings play a key role in configuring meanings of effectiveness. Moreover, every attendee’s configuration of meaning consists of an amalgamation of a more or less heterogeneous set of emotions regarding the committee’s formal duties—emotions that vary from confidence to hopefulness to anxiety. As such, the paper problematizes several assumptions that underlie corporate governance literature.

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