Qualitative Insights into Corporate Governance Reform, Management Decision-Making, and Accounting Performance Semi-structured Interview Evidence

Abstract

Purpose – To enhance our understanding of the relations between corporate governance reform, management decision-making, and firm accounting performance in Kuwait by focusing on the role of important but difficult to quantitatively measure factors, including culture, religion, tribal, and political circumstances. Design/methodology/approach – The analysis of data collected using semi-structured interviews using coding and quoting approaches. The coding approach categorises the responses into themes and sub-themes and the quoting approach adds depth to this categorisation. We interpret the results in the context of related studies concerning the factors affecting the corporate governance–firm performance relationship. Findings – A range of external cultural factors, including religion, politics, and Kuwait’s tribal system, along with economic and financial circumstances and accounting standards, influence the corporate governance–firm performance relationship in Kuwait. The in-depth semi-structured interviews reveal the incentives for shareholders and managers to achieve high firm performance through good corporate governance, but especially for better-performing firms. Suggestion of broad support by firm managers and directors for recent reforms concerning Kuwait’s corporate governance code and guidelines. Research limitations/implications – Qualitative research provides additional insights into the traditionally quantitative analysis of the corporate governance–firm performance relationship. It is particularly useful into developing market contexts where data is limited and regulatory frameworks are undergoing rapid change. Practical implications – The findings are of value to domestic and international investors gauging investment risk, firm managers operating within a growing and developing but still traditional market, and regulators seeking ongoing improvements in corporate governance, including disclosure, openness, and transparency. Originality/value – This is the first study to apply qualitative methods to the analysis of the corporate governance–firm performance relationship in Kuwait, particularly in light of recent and extensive corporate governance reform.