Back from two interesting days at the annual conference of the British Accounting and Finance Association. This year those of us who had received awards from BAFA in past years were invited back specifically to provide feedback to early career researchers. One of the privileges of an academic career is the opportunity to help those who are just starting out so I was delighted to be asked although my heart did sink slightly when I read the papers in the session which I had been assigned to chair with Mike Page. They were all about audit but all quantitative and only one author had any practical experience of auditing and that wasn't really apparent in his work.
The presentations were excellent - all kept to time and were very accomplished, especially when considering that English was not the first language of those presenting. Mike was able to give them some feedback on their stats and we both agreed that they needed to tell more of a story to give their work greater context. If you've spent several years immersed in the fine detail of doctoral work it's quite a shift to step back and look at the big picture. But I did think that some of the research questions addressed, particularly those considering relationships between people, were not best tackled by the use of archival data.
In a very lively and thought provoking plenary address, last year's Distinguished Academic, Professor Jeffrey Unerman discussed the implications of the Brexit and Trump campaigns for accounting and finance academics. In the course of his presentation, he urged the audience to consider carefully the choice of research tools to investigate their research questions. I was certainly struck by the dominance of quantitative approaches in the papers at the conference but it is not difficult to see why this is happening as the opportunities for getting qualitative studies published in top ranking journals is limited and it is much easier and less time-consuming to find archival data to crunch than to gain access to appropriate interviewees or documentary sources.
At the other extreme, a paper, which attempted to stretch the understanding of what accounting is, considered war cemeteries as a means of accounting for the cost of war. Bizarrely, I found myself among a group of non-British academics who, while explaining how moving they found these places, also seemed to be developing a critique of the British government's management of the aftermath of World War 1. As a Brit whose great-uncle's wartime death is commemorated on the Chatby memorial I felt that I should have some comment to make but couldn't quite frame it appropriately.
Many of the papers scattered throughout the conference programme included corporate governance in their titles. This led me to joke that such attention probably signifies that corporate governance is dead. It appears that I am not the only one thinking this: Bob Garratt has written an interesting piece with this title for the RSA website. I agree with Bob that the focus of accountability should spread beyond boards but I don't think his remedy goes far enough to address the mismatch between the legal and regulatory structure which frames corporate reporting and the wider demands for accountability now being placed on business. When integrated reporting was first mooted, I thought this might be a big step towards solving this problem but it has been slow to make an impact. But several people attending the conference told me that they were looking at IR in their work so maybe academics can progress this in some way.
A paper by Niamh Brennan and Phil Shrives developed their continuing study of compliance with the UK Corporate Governance Code, looking at serious serial non-compliers. I think this is a very useful documentation of the impact of the Code but it is again important to step back and look at the big picture, in this case the way that approaches to the Code have evolved from its inception. But I would say that, wouldn't I? And I did suggest that they should read my book...
The paper that worried me most attempted to link the presence of female executive directors on boards with levels of executive remuneration in the UK. I found the fundamental assumption, that female directors could influence the level of accounting conservatism and thus the earnings on which executive compensation is based, quite unconvincing. Having focused only on female executives. they seemed to have ignored two important facts: a) the increased number of female directors since the Davies report are predominantly non-executives and b) it's NEDs who form remcos and make decisions about executive remuneration. But the really worrying aspect lay in their list of future research possibilities where they suggested exploring the impact on executive pay of other aspects of board diversity such as ethnicity, disability and sexual orientation. In one of those daft after-dinner conversations one has at conferences I had suggested that every company board should include a dog: this paper seemed to be moving perilously close to that idea...
For me, the most stimulating paper of the conference was presented by Lisa Jack who, working with Julia Mundy, is looking at the relationship between investment analysts and companies from a perspective of fairness and relational justice, using the theories of John Rawls. Unpicking such relationships is no easy task, with all the challenges of access to those involved, but this seems to me a very important attempt to throw light on the opaque workings of the investment intermediary chain. I shall watch the unfolding of this work with considerable interest.
