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Clear Delegation or Residual Accountability in Swedish Corporate Governance

Schultz, Erik LU (2025) 85th Annual Meeting of the Academy of Management, AOM 2025 In Academy of Management annual meeting proceedings 2025(1).
Abstract
This paper investigates distribution of decision rights and responsibilities between boards of directors and CEOs with a particular focus on allocation of residual control rights. In the studied firms, the board reserves residual control rights, stating that all major decisions are to reach the board. However, the CEO is authorized to make decisions on urgent matters if the board cannot be heard without significant inconvenience for the firm. Yet, the constitution of “major”, “urgent”, and “significant inconvenience” remains vague and leaves room for interpretation. For such instances, when the CEO makes a judgement call regarding their own decision rights, the concept of residual accountability is proposed. Residual accountability refers... (More)
This paper investigates distribution of decision rights and responsibilities between boards of directors and CEOs with a particular focus on allocation of residual control rights. In the studied firms, the board reserves residual control rights, stating that all major decisions are to reach the board. However, the CEO is authorized to make decisions on urgent matters if the board cannot be heard without significant inconvenience for the firm. Yet, the constitution of “major”, “urgent”, and “significant inconvenience” remains vague and leaves room for interpretation. For such instances, when the CEO makes a judgement call regarding their own decision rights, the concept of residual accountability is proposed. Residual accountability refers to instances when agents act outside of their clearly specified decision rights, making themselves accountable for their decisions until the principal approves them, thereby absorbing the residual accountability from the agent. The concept of residual accountability adds to our understanding of accountability by bridging the gap between rule-based and negotiated forms of accountability. (Less)
Please use this url to cite or link to this publication:
author
organization
publishing date
type
Chapter in Book/Report/Conference proceeding
publication status
published
subject
keywords
residual accountability, board of directors, delegation
host publication
Academy of Management Proceedings
series title
Academy of Management annual meeting proceedings
volume
2025
issue
1
publisher
Academy of Management
conference name
85th Annual Meeting of the Academy of Management, AOM 2025
conference location
Copenhagen, Denmark
conference dates
2025-07-25 - 2025-07-29
ISSN
2151-6561
language
English
LU publication?
yes
id
bb35c2a5-c53c-45ec-8e52-df6d8409c2da
alternative location
https://journals.aom.org/doi/abs/10.5465/AMPROC.2025.21196abstract
date added to LUP
2025-08-08 09:44:35
date last changed
2025-08-08 13:27:31
@inproceedings{bb35c2a5-c53c-45ec-8e52-df6d8409c2da,
  abstract     = {{This paper investigates distribution of decision rights and responsibilities between boards of directors and CEOs with a particular focus on allocation of residual control rights. In the studied firms, the board reserves residual control rights, stating that all major decisions are to reach the board. However, the CEO is authorized to make decisions on urgent matters if the board cannot be heard without significant inconvenience for the firm. Yet, the constitution of “major”, “urgent”, and “significant inconvenience” remains vague and leaves room for interpretation. For such instances, when the CEO makes a judgement call regarding their own decision rights, the concept of residual accountability is proposed. Residual accountability refers to instances when agents act outside of their clearly specified decision rights, making themselves accountable for their decisions until the principal approves them, thereby absorbing the residual accountability from the agent. The concept of residual accountability adds to our understanding of accountability by bridging the gap between rule-based and negotiated forms of accountability.}},
  author       = {{Schultz, Erik}},
  booktitle    = {{Academy of Management Proceedings}},
  issn         = {{2151-6561}},
  keywords     = {{residual accountability; board of directors; delegation}},
  language     = {{eng}},
  month        = {{06}},
  number       = {{1}},
  publisher    = {{Academy of Management}},
  series       = {{Academy of Management annual meeting proceedings}},
  title        = {{Clear Delegation or Residual Accountability in Swedish Corporate Governance}},
  url          = {{https://journals.aom.org/doi/abs/10.5465/AMPROC.2025.21196abstract}},
  volume       = {{2025}},
  year         = {{2025}},
}