Does more corporate governance enhance managerial performance? CFO perceptions and the role of mindfulness

Abstract

The results of studies into the effects of enhanced governance structures have been equivocal andthere is virtually no literature on the performance effects of individual managers, such as theprofessional accountant in practice. This paper reports the results of an empirical study designedto assess the relationship of governance structures, specifically the conformance and performancedimensions defined by the International Federation of Accountants (2009), to mindfulness andmanagerial performance among CFOs in Canadian firms. Organizational theory describing highreliability organizations provides the theoretical framework for specifying and appraisingcapacity for mindfulness. As predicted, there is no significant direct relationship betweengovernance and managerial performance for the conformance dimension; instead, thisrelationship is explained by the path through capacity for mindfulness and on to managerialperformance, both of which are positively significant. Likewise, there is no significantrelationship between governance and managerial performance for the conformance dimension;however, although there is a significant path between the performance dimension and capacity formindfulness, the path from the latter to managerial performance is insignificant. Implicating thepowerful role of the controllability principle in accounting may explain this unexpected finding.