The construction of calculative expertise: The integration of corporate governance into investment analyses by sell-side financial analysts

Abstract

This study analyses an emerging form of economic calculation in financial markets, namely, the integration of corporate governance into investment analyses undertaken by sell-side financial analysts. It examines how the expertise of these analysts in corporate governance integration is constructed, with particular attention to the calculative ideas and calculative devices through which it is achieved. Corporate governance integration is shaped by certain ‘calculative ideas’. These relate to ideas about the potential link between corporate governance and financial performance and the ideal of incorporating governance criteria into the investment process. This paper suggests that these calculative ideas have constituted the discursive conditions under which analysts sought to build their expertise in a new domain. The paper also shows that at a time when the quality of traditional sell-side research was scrutinised, the investment professional association and constituents of the investing public, through their arguments and discourses, constructed analysts as the ‘specialists’ having the imperative and credibility to perform corporate governance integration. Furthermore, as the paper demonstrates, analysts have sought to ‘theorize’ calculative ideas. They have normatively deployed certain ‘calculative devices’ to make corporate governance integration operational. Corporate governance integration is conducted in ways that make it receptive to the claims of a particular form of expertise, that of analysts. This paper suggests that it is through the assemblage formed over time between the ideas and aspirations on the one hand, and the tools and devices on the other, that the expertise of analysts in corporate governance integration has gradually been formed.