An analysis of the nature and effectiveness of corporate governance in smaller listed Australian companies

The objective of this thesis is to investigate the corporate governance attributes of smaller listed Australian firms. This study is motivated by evidence that these firms are associated with more regulatory concerns, the introduction of ASX Corporate Governance Recommendations in 2004, and a paucity of research to guide regulators and stakeholders of smaller firms. While there is an extensive body of literature examining the effectiveness of corporate governance, the literature principally focuses on larger companies, resulting in a deficiency in the understanding of the nature and effectiveness of corporate governance in smaller firms. Based on a review of agency theory literature, a theoretical model is developed that posits that agency costs are mitigated by internal governance mechanisms and transparency. The model includes external governance factors but in many smaller firms these factors are potentially absent, increasing the reliance on the internal governance mechanisms of the firm. Based on the model, the observed greater regulatory intervention in smaller companies may be due to sub-optimal internal governance practices. Accordingly, this study addresses four broad research questions (RQs). First, what is the extent and nature of the ASX Recommendations that have been adopted by smaller firms (RQ1)? Second, what firm characteristics explain differences in the recommendations adopted by smaller listed firms (RQ2), and third, what firm characteristics explain changes in the governance of smaller firms over time (RQ3)? Fourth, how effective are the corporate governance attributes of smaller firms (RQ4)? Six hypotheses are developed to address the RQs. The first two hypotheses explore the extent and nature of corporate governance, while the remaining hypotheses evaluate its effectiveness. A time-series, cross-sectional approach is used to evaluate the effectiveness of governance. Three models, based on individual governance attributes, an index of six items derived from the literature, and an index based on the full list of ASX Recommendations, are developed and tested using a sample of 298 smaller firms with annual observations over a five-year period (2002-2006) before and after the introduction of the ASX Recommendations in 2004. With respect to (RQ1) the results reveal that the overall adoption of the recommendations increased from 66 per cent in 2004 to 74 per cent in 2006. Interestingly, the adoption rate for recommendations regarding the structure of the board and formation of committees is significantly lower than the rates for other categories of recommendations. With respect to (RQ2) the results reveal that variations in rates of adoption are explained by key firm differences including, firm size, profitability, board size, audit quality, and ownership dispersion, while the results for (RQ3) were inconclusive. With respect to (RQ4), the results provide support for the association between better governance and superior accounting-based performance. In particular, the results highlight the importance of the independence of both the board and audit committee chairs, and of greater accounting-based expertise on the audit committee. In contrast, while there is little evidence that a majority independent board is associated with superior outcomes, there is evidence linking board independence with adverse audit opinion outcomes. These results suggest that board and chair independence are substitutes; in the presence of an independent chair a majority independent board may be an unnecessary and costly investment for smaller firms. The findings make several important contributions. First, the findings contribute to the literature by providing evidence on the extent, nature and effectiveness of governance in smaller firms. The findings also contribute to the policy debate regarding future development of Australia’s corporate governance code. The findings regarding board and chair independence, and audit committee characteristics, suggest that policy-makers could consider providing additional guidance for smaller companies. In general, the findings offer support for the “if not, why not?” approach of the ASX, rather than a prescriptive rules-based approach.

The desire for the construction industry to move towards lifecycle carbon emissions analysis

A significant reduction in carbon emissions is a global mission and the construction industry has an indispensable role to play as a major carbon dioxide (CO2) generator. Over the years, various building environmental assessment (BEA) models and concepts have been developed to promote environmentally responsible design and construction. However, limited attention has been placed on assessing and benchmarking the carbon emitted throughout the lifecycle of building facilities. This situation could undermine the construction industry’s potential to reduce its dependence on raw materials, recognise the negative impacts of producing new materials, and intensify the recycle and reuse process. In this paper, current BEA approaches adopted by the construction industry are first introduced. The focus of these models and concepts is then examined. Following a brief review of lifecycle analysis, the boundary in which a lifecycle carbon emission analysis should be set for a construction project is identified. The paper concludes by highlighting the potential barriers of applying lifecycle carbon emissions analysis in the construction industry. It is proposed that lifecycle carbon emission analysis can be integrated with existing BEA models to provide a more comprehensive and accurate evaluation on the cradle-to-grave environmental performance of a construction facility. In doing so, this can assist owners and clients to identify the optimum solution to maximise emissions reduction opportunities.

Scaling analysis of the thermal boundary layer adjacent to an abruptly heated inclined flat plate

The natural convection thermal boundary layer adjacent to an abruptly heated inclined flat plate is investigated through a scaling analysis and verified by numerical simulations. In general, the development of the thermal flow can be characterized by three distinct stages, i.e. a start-up stage, a transitional stage and a steady state stage. Major scales including the flow velocity, flow development time, and the thermal and viscous boundary layer thicknesses are established to quantify the flow development at different stages and over a wide range of flow parameters. Details of the scaling analysis and the numerical procedures are described in this paper.

Scaling analysis of unsteady natural convection boundary layer for ramp heating

A scaling analysis for the natural convection boundary layer adjacent to an inclined semi-infinite plate subject to a non-instantaneous heating in the form of an imposed wall temperature which increases linearly up to a prescribed steady value over a prescribed time is reported. The development of the flow from start-up to a steady-state has been described based on scaling analyses and verified by numerical simulations. The analysis reveals that, if the period of temperature growth on the wall is sufficiently long, the boundary layer reaches a quasisteady mode before the growth of the temperature is completed. In this mode the thermal boundary layer at first grows in thickness and then contracts with increasing time. However, if the imposed wall temperature growth period is sufficiently short, the boundary layer develops differently, but after the wall temperature growth is completed, the boundary layer develops as though the start up had been instantaneous. The steady state values of the boundary layer for both cases are ultimately the same.

Scaling analysis of unsteady natural convection boundary layer for instantaneous heating

Natural convection thermal boundary layer adjacent to an instantaneous heated inclined flat plate is investigated through a scaling analysis and verified by direct numerical simulations. It is revealed from the analysis that the development of the boundary layer may be characterized by three distinct stages, i.e. a start-up stage, a transitional stage and a steady state stage. These three stages can be clearly identified from the numerical simulations. Major scales including the flow velocity, flow development time, and the thermal and viscous boundary layer thicknesses are established to quantify the flow development at different stages and over a wide range of flow parameters. Details of the scaling analysis are described in this paper.