nt itself. In such case, the press is
regarded as a passive, invisible conduit of information.
Another approach, one that is amenable to
disciplines grounded in rational models of human
behavior, has regarded members in the press as
information mediaries who act as ‘expert monitors’
(Pollock and Rindova, 2003: 631), or information
middlemen (e.g., Bigalaiser, 1993), procuring and
assembling information for sale to their audiences.
On this account, media organizations are essentially
brokers competing in a market for financial
information, deploying specialized resources
to collect, assemble, market, and sell information
on business-related issues. Success in the market
for financial information is presumably based
on the quality of the goods—i.e., information
that leads to investments that generate returns. To
consistently publish unreliable information would
lead readers relying on that information to make
unprofitable investments, thus risking the publication’s
own valuable reputation and sending readers
to alternative information providers. Added to
this market discipline are journalists’ professional
norms to ‘record thoroughly important events,
issues, and opinions about them for the public’
(Deephouse, 2000: 1095).
In the context of corporate governance, the
press brokers information on boards of directors’
legal fiduciary responsibility to protect stockholders
from managerial abuses. Most theories
of corporate governance, even including competing
views such as managerialism and agency theory,
accept that at least some agency costs are
inevitable, and there will be variance in boards’
effectiveness in managing those costs, to the extent
that boards are not culpable themselves. A vigilant
financial press may act as one check against
abuses by managers and/or directors, by investigating
and reporting on governance matters, enabling
informed investment decisions. The information
brokering role is fulfilled by the Business Week
stories in the sense that data from numerous and
varied sources, including sources not previously
publicly available are gathered, analyzed, and presented
to readers.
Legitimacy is a focus of the social constructivist
perspective (e.g., Pollock and Rindova, 2003;
Deephouse, 2000; Zuckerman, 1999; Lamertz and
Baum, 1998), and the financial press can play an
active role in both creating and applying the standards
that define legitimacy. In the context of corporate
governance, there is uncertainty even in the
academic world about what constitutes appropriate
roles, actions, and attributes of boards of directors
(e.g., Westphal, 1999; Johnson, Daily, and
Ellstrand, 1996), uncertainty that extends into the
investor community. Investors’ understanding of
what constitutes acceptable corporate governance
practices may be grounded in a variety of sources,
including the financial press.
The degree and kind of media coverage given
to a firm sends signals to investors over and above
the information being reported. By selecting specific
issues and firms to report on from an unlimited
array of choices, the press ‘sets the agenda’
(McCombs, 1992) for the public, implicitly identifying
which issues and firms are important. Simply
being included in media reports may confer
a certain degree of legitimacy to firms (Zuckerman,
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