Financial and technical competence of municipal board members: Empirical evidence from the water sector



: Eija Vinnari, Salme Näsi

Publisher: Academic Press

: 2013

: Critical Perspectives On Accounting

: CPA

: 24

: 7-8

: 488

: 501

: 14

: http://dx.doi.org/10.1016/j.cpa.2013.08.005


The purpose of this article is to investigate municipal board members’ financial and technical competence and analyse factors explaining the presence of such competence. Financial expertise estimates were constructed based on the board members’ education and professional experience, while financial literacy levels were estimated based on prior board experience and participation in additional training in accounting and finance. Board members’ technical competence was assessed in terms of their education. Quantitative data was derived from a survey administered to 354 municipal water utility board members in Finland. The response rate was 52%. The results of the study indicate, first of all, that municipal board members’ estimated financial competence levels are not high and that financial competence is associated with organizational form. Secondly, board members’ technical competence levels are also fairly low and technical competence is associated with political affiliation. Stewardship theory offers the most plausible explanation for the influence of organizational form on financial and technical competence, while the resource dependency view provides an explanation for the effect of political affiliation on technical competence.



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