Socio-economy & New Tech



Corporate governance and ethics management in professional service firms

Serving clients and making profits as a firm are two objectives that can sometimes be at odds, yet professional service firms (PSFs) have to do both. “Today there has been a shift in the law and accounting industries, traditionally infused with a dominant professional logic, toward a commercial ethos,” says Lander. Due to changes in their business environment, PSFs tend to behave more like regular business organizations, with a primary goal in mind: improving economic performance.
Unfortunately, however, Lander warns that this new logic seems to result in more professional misconduct. The practices that improve performance (strategiz-ing and formal governance) replace social controls, eventually leading to misconduct.
His research aims at providing insights into the relationship between performance and misconduct. His findings may be relevant not only for PSFs, but also for policy makers in drafting future regulations on professional misconduct.
My research focuses on contributing to our understanding of the corporate governance and ethics management practices of PSF’s. More in particular, the following research topics will guide the different research projects that jointly constitute this PhD proposal:

Profits or Professionalism?

  • What is a professional Service firm?
  • Corporate governance of professional service firms.
  • Ethics and compliance programs in PSF.
  • The management/strategy problem within PSFs
  • Diffusion of structural forms and features in PSFs.

Michel W. Lander is a PhD candidate in management at the Rotterdam School of Management, Erasmus University. He holds masters degrees in International Business Administration, Business Administration and a Masters of Philosophy degree in Research in Management. His research interest include institutional and population ecology theories of organization, and management, ethics and governance of professional service firms.

Research work

Because most research and theory development in management and corporate governance is about publicly listed firms, relatively little is known about management and governance of professional service firms (PSFs). What is known is that PSFs: (1) often have a partnership ownership structure, (2) typically operate in highly institutionalized environments (e.g. the professions), and (therefore) face (3) unusual governance and management challenges. In spite of our limited knowledge of these types of organizations, they do play a crucial role in the current business environment. Gate keeper failure, for example, played a crucial role in both the big accounting scandals (accountants) and the current credit crisis (credit rating agencies), but is hardly understood itself. Research to date has focused exclusively on how external institutions such as rules, regulations and gatekeeper liability can guard the integrity and quality of professional gate keeper services, but has ignored the specific organizational features of the professional service firms (PSFs) that provide them. Yet PSFs are typically partnerships that face unique organizational challenges. In my research will use both qualitative and quantitative research methods, and seek to come to an understanding of: 1) the corporate governance of PSFs, 2) the adoption of ethics and compliance programs in PSF and 3) the role of professional associations in guarding the integrity and quality in law and accounting.

What AXA means to my research

The AXA Research Fund allows me to be more thorough in my research as I will be able to appoint a research assistant. That way I will be able to broaden the scope of my data collection efforts. Also the funding will allow me to visit conferences and workshops that help me communicate my research in to both the academic and professional communities. I am therefore very much indebted to AXA for selecting my project as one of the few they have chosen to fund.

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Erasmus University Rotterdam