Do ‘Good Governance’ Codes Enhance Financial Accountability? Evidence from Managerial Pay in Dutch Charities
Financial Accountability and Management, Forthcoming
41 Pages Posted: 10 Nov 2013
Date Written: November 9, 2013
Abstract
This paper examines the initial impact of a ‘good governance’ code for charitable organizations 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 it mitigates managerial pay level.
Keywords: nonprofit sector, charities, governance, codes, managerial pay
JEL Classification: M4
Suggested Citation: Suggested Citation