Councillors' perceptions of audit committees: a strong structuration analysis

Abstract

This thesis explores how councillors in English local councils perceive audit committees and the impact of those perceptions on the audit committee’s governance and accountability roles, analysed through Quadripartite Strong Structuration Theory (Stones, 2005). Audit committees are not compulsory in England other than in Mayoral authorities but most councils have one and, while there is a considerable volume of research relating to audit committees particularly in the private sector, studies of councillors’ perceptions of them and the impacts of those perceptions on the governance and accountability roles of audit committees within the specific context of English local councils are very limited. It is this gap that this research aims to reduce. Assuming a phenomenological approach and underpinned by Quadripartite Strong Structuration Theory (Q.S.S.T.), data were collected through minimally structured interviews with 24 councillors who were members of their councils' audit committees or, recent members, at the time of the interviews. Using the quadripartite structure of Q.S.S.T. as the analytical framework, analysis of the interviews revealed three themes: 'The Cinderella Committee,' 'The Schleswig-Holstein Question' and 'The Party Hat.' 'The Cinderella Committee' reveals a general dispositional framework in which audit committees are perceived as mundane and low priority, leading to avoidance behaviours among councillors. ' The Schleswig-Holstein Question' uncovers the challenges councillors face in understanding complex financial reports and the perceived inadequacy of training, which constrains the ability to question effectively. ' The Party Hat' exposes the influence of political allegiances on audit committee independence and effectiveness, revealing conflicts of interest and the need for personal resilience among councillors in fulfilling their audit committee roles. The interview data suggest that, while some councillors recognise the importance of audit committees, negative perceptions and partisan influences often hinder the audit committee’s capacity to fulfil its governance and accountability roles effectively. Against this backdrop of negativity, some interviewees, perceiving a conflict between their prior knowledge of audit committees and their current council experience, exercised their active agency to change negative attitudes and improve the independence and competence of the audit committee through positive messaging, changing the audit chair where that was perceived to be a political appointment and organising training and mentoring. These measures were effective but could be disrupted by changes in political leadership or control. Interviewees in opposition felt constrained by political structures from attempting to make changes. This study concludes that the consistency of the narrative between interviewees from various councils provides evidence that councillors' perceptions of audit committees shape their engagement, competence, and independence which directly impacts the committee's effectiveness in fulfilling its governance and accountability roles. These perceptions reveal challenges and weaknesses within local council audit committees but the insights gained may assist in the development of policies to enhance financial governance and accountability in English local councils