Theorising South Africa's corporate governance

South Africa’s principal corporate governance report aspires to an ‘inclusive’ approach to corporate governance, in which companies are clearly advised to consider the interests of a variety of stakeholders. Yet, in common with many other countries, there is little discussion of the theoretical foundations and assumptions implicit in the recommended approach to corporate governance. The purpose of this article is to provide an analysis of corporate governance and the corporate environment in South Africa in terms of existing theory and models of corporate governance, and to provide a critique based on a consideration of traditional African values and the socio-economic necessities of post-apartheid South Africa. The result is the identification of an incompatibility between the current corporate environment in South Africa and the given exposition of African values. Some prospects for change are then identified.

A study of governance arrangements for land use and natural resource management planning in Cape York Peninsula

Complex intersecting social, economic and environmental dilemmas in Australia's Cape York Peninsula present a number of challenges for planners seeking to develop and implement land use and natural resource management (NRM) plans. There have been five different attempts at land use and NRM planning in Cape York Peninsula over the last 20 years. These processes have (to greater or lesser extents) failed to deliver community-owned and government-supported plans to guide development and/or the management of the region's natural resources. The region is remote, sparsely populated, and home to a significant Indigenous population. Much of the contestation within the region surrounds the access, use and ownership of the region's internationally valuable natural resources. This paper reviews, from the literature, the relevancy and applicability of criteria for best practice planning and governance. A range of identified best practice governance and planning principles are applied to assess the governance arrangements for planning in the Peninsula. The paper finds that decision-making arrangements for land use and NRM planning in the Peninsula are still in their infancy and are inadequate to support effective outcomes. The paper concludes that broader attention to best practice principles in governance for planning is needed to improve planning outcomes.

Corporate Governance in the 21st Century: Japan's Gradual Transformation

The 'lost' decade of economic stagnation in Japan during the 1990s has become a 'found decade' for regulatory and institutional reform. With nearly all areas of the 'law in the books' reviewed, revised and rewritten, the Japanese legal system is no longer the system that foreign commentators felt they were finally starting to understand by the 1980s. Nowhere is this more evident than in corporate governance. Corporate and securities legislation has been comprehensively revamped over 1993-2007, creating a more flexible and transparent regime for shareholders and managers. Financial markets law and regulatory institutions have changed, too, creating a new context for Japan's 'main banks' as alternative or additional outside monitors of managerial performance in borrowing firms. Even the legislation surrounding labour regulations has been amended, reinforcing the lifelong security privileges for elite employee-stakeholders, yet also hastening the growth of other atypical employment relationships. But how do such legislative reforms affecting key players in Japanese firms, covering areas central to the design of Japanese capitlaism, play out in the 'law in action'? Overall, this book argues that a significant gradual transformation has occurred. Although this is evident also in other advanced industrialised democracies, such as Germany, Japan reveals especially complex interactions in the various fields that sometimes emphasise different ways of achieving such transformation.

Governance and regional planning outcomes: Using governance indicators to support a policy implementation approach

Regional planning faces numerous decision making uncertainties related to the complex interdependencies between urban and regional centres. Questions about how to achieve sustainable planning solutions across regions are a key uncertainty and relate to a lack of information about the actual achievement of outcomes as proposed by the objectives of a plan. Regional plan implementation and its impact on environmental, social and economic outcomes have been little explored within Australian urban and regional planning research. Despite a desire to improve the conditions across Australian regions, ambiguity persists regarding the results of regional planning efforts. Of the variables affecting regional planning, scholars argue that governance has a significant impact on achieving outcomes (see Pahl-Wostl 2009). In order to better analyse the impact of governance, we propose a set of governance indicators to examine decisions across regional planning institutions and apply this to governance models across Queensland’s regions. We contend that these governance indicators can support a more rigorous assessment of the impacts of governance models on plan implementation and outcomes. We propose that this is a way to better understand the relationship between planning and outcomes across urban and regional areas.

Introduction: Japan’s gradual transformation in corporate governance

Japan has recovered from a ‘lost decade’ of economic stagnation over the 1990s. Anyway, it has been a ‘found decade’ for civil and criminal justice law reform, especially in corporate and securities law. Yet, have liberalisation and globalisation in those fields led to major changes in the ‘law in action’? Does this represent ‘Americanisation’ of Japan’s corporate governance system, focusing on shareholders rather than other key stakeholders such as ‘main banks’, core employees, and partners within diffuse corporate groups (keiretsu)? This version of our introductory chapter explains how our forthcoming book argues for a more complex ‘gradual transformation’. Such shifts are also found in many other post-industrial economies, but Japan appears to give greater emphasis given to certain modes of achieving change. The book brings together contributions from academics and practitioners from Japan, Australia, New Zealand, Canada and the United States. An early chapter introduces methodology for effective cross-country comparisons and for evaluating the burgeoning but divergent literature on Japanese corporate governance. The concluding chapter compares continuities and changes in Japan’s largest companies now and two decades ago. Other chapters cover ‘lifelong employment’, main banks, the untold story of closely-held companies, the limited uptake of the Committee-based governance form, and the procedural, substantive and FDI policy dimensions of takeovers law and practice.

Corporate governance and law reform in Japan: From the lost decade to the end of history?

Japan is in the midst of massive law reform. Mired in ongoing recession since the early 1990s, Japan has been implementing a new regulatory blueprint to kickstart a sluggish economy through structural change. A key element to this reform process is a rethink of corporate governance and its stakeholder relations. With a patchwork of legislative initiatives in areas as diverse as corporate law, finance, labour relations, consumer protection, public administration and civil justice, this new model is beginning to take shape. But to what extent does this model represent a break from the past? Some commentators are breathlessly predicting the "Americanisation" of Japanese law. They see the triumph of Western-style capitalism - the "End of History", to borrow the words of Francis Fukuyama - with its emphasis on market-based, arms-length transactions. Others are more cautious, advancing the view that there new reforms are merely "creative twists" on what is a uniquely (although slowly evolving) strand of Japanese capitalism. This paper takes issue with both interpretations. It argues that the new reforms merely follow Japan's long tradition of 'adopting and adapting' foreign models to suit domestic purposes. They are neither the wholesale importation of "Anglo-Saxon" regulatory principles nor a thin veneer over a 'uniquely unique' form of Confucian cultural capitalism. Rather, they represent a specific and largely political solution (conservative reformism) to a current economic problem (recession). The larger themes of this paper are 'change' and 'continuity'. 'Change' suggests evolution to something identifiable; 'continuity' suggests adhering to an existing state of affairs. Although notionally opposites, 'change' and 'continuity' have something in common - they both suggest some form of predictability and coherence in regulatory reform. Our paper, by contrast, submits that Japanese corporate governance reform or, indeed, law reform more generally in Japan, is context-specific, multi-layered (with different dimensions not necessarily pulling all in the same direction for example, in relations with key outside suppliers), and therefore more random or 'chaotic'.

Governance and regional variation of homicide rates: Evidence from cross-national data

Criminological theories of cross-national studies of homicide have underestimated the effects of quality governance of liberal democracy and region. Data sets from several sources are combined and a comprehensive model of homicide is proposed. Results of the spatial regression model, which controls for the effect of spatial autocorrelation, show that quality governance, human development, economic inequality, and ethnic heterogeneity are statistically significant in predicting homicide. In addition, regions of Latin America and non-Muslim Sub-Saharan Africa have significantly higher rates of homicides ceteris paribus while the effects of East Asian countries and Islamic societies are not statistically significant. These findings are consistent with the expectation of the new modernization and regional theories.

Private governance of public rights in Japan: Revisiting the Japanese governance debate

Dramatic growth in the Japanese economy in the postwar period – and its meltdown in the 1990s – has attracted sustained interest in the power dynamics underlying the management of Japan’s administrative state. For a long time, scholars and commentators have debated about who wields power in Japan. The question has been asked in different ways. In the 1970s and 1980s, the question was usually posed as: who orchestrated Japan’s economic miracle in the 1960s and 1970s? Today, the question is usually reframed to: who is accountable for the policy failures that plunged Japan into financial crisis and recession during the 1990s? Yet the core issue remains the same – who governs Japan? (Johnson 1995)...

Corporate fraud culture: Re-examining the corporate governance and performance relation

We analyse the corporate governance and performance relation, when conditioning on corporate fraud, for fraud firms during 2000 – 2007. Fraud firms are identified as either self- reported fraud events, or subject to regulatory investigation. We use the inverse Mills ratio procedure to account for firms' (unobservable) fraud culture in the dynamic system GMM model of the performance- governance relation. We find that corporate governance is an endogenously determined characteristic that has no causal impact on firm performance when conditioning on fraud. Fraud is a significant regulatory event but its overall economic impact at the firm level is highly variable.

The economic consequences of corporate financial reporting on Twitter

The use of social media has spread into many different areas including marketing, customer service, and corporate disclosure. However, our understanding of the timely effect of financial reporting information on Twitter is still limited. In this paper, we examine the timely effect of financial reporting information on Twitter in the Australian context, as reflected in the follow-up stock market reaction. With the use of event methodology and comparative setting, we find that financial reporting disclosure on Twitter reduces the information asymmetry level. This is evidenced by reduction of bid-ask spread and increase of share trading volume. The results of this study imply that financial reporting disclosure on social media assists the dissemination of information and the stock market response to this information

Nonprofit Boards in Australia: A Distinctive Governance Appoach

This article reports the findings into patterns of governance on nonprofit boards in Australia. The research surveys 118 boards, upon which serve a total of 1405 directors. The findings indicate that nonprofit boards can mimic some aspects of a shareholder approach to governance. But nonprofit boards, in the main, indicate priorities and activities of a stakeholder approach to governance. The features of `isomorphism' that arise largely stem from legislative requirements in corporate governance. Generally, nonprofit directors are influenced by agenda and motivations that can be differentiated from the influences upon director activity in the corporate sector. The study indicates that nonprofit boards prize knowledge and loyalty to the sector when considering board composition. The survey suggests nonprofits ``compensate'' for the demands placed upon them about fiduciary duty and due diligence responsibilities with the diverse intellectual expertise of non-executive directors. Nonprofit boards possess greater diversity than boards in the corporate sector; they include more women as directors than corporate boards and they include a greater proportion of directors from minority groups. While strategic issues feature significantly as a task of the nonprofit board, they distinguish themselves from their corporate counterparts by engaging in operational management. The findings indicate that, in the main, directors on nonprofit boards deliberate and operate in ways distinctive from their corporate counterparts. Such findings offer a contribution to the reform of Corporations Law in other countries and the likely consequence on boards outside the corporate sector.