The association between corporate governance guidelines and risk management and internal control practices: Evidence from a comparative study

Purpose – The purpose of this paper is to investigate whether the weaker focus on risk management and internal control within the Belgian corporate governance guidelines is associated with less developed risk management and internal control systems within Belgian companies, when compared to Australian companies. Design/methodology/approach – Theoretical arguments were drawn from institutional theory. Data for the study were collected through a questionnaire that was sent out to chief audit executives in Australia and Belgium. Findings – The paper finds that the weaker focus of the Belgian corporate governance guidelines on risk management and internal control is associated with less developed risk management and internal control systems in Belgian companies than in Australian companies. Originality/value – The paper contributes to the literature on corporate governance, as it suggests that the specific content of corporate governance guidelines is an important variable to take into account. This paper also confirms that institutional theory is a relevant framework to study on the one hand, corporate governance practices in a “comply or explain” context, and on the other hand, corporate governance practices within unlisted companies.