The equity and efficiency of the Australian share market with respect to director trading

Purpose – The purpose of this paper is to investigate the extent of directors breaching the reporting requirements of the Australian Stock Exchange (ASX) and the Corporations Act in Australia. Further, it seeks to assess whether directors in Australia achieve abnormal returns from trades in their own companies. Design/methodology/approach – Using an event study approach on an Australian sample, abnormal returns for a range of situations were estimated. Findings – A total of 13 (seven) per cent of own‐company directors trades do not meet the ASX (Corporations Act) requirement of reporting within five (14) business days. Directors do achieve abnormal returns through trading in shares of their own companies. Ignoring transaction costs, outsiders can achieve abnormal returns by imitating directors' trades. Analysis of returns to directors after they trade but before they announce the trade to the market shows that directors are making small but statistically significant returns that are not available to the market. Analysis of returns to directors subsequent to the ASX reporting requirement up to the day the trade is reported shows that directors are making small but statistically significant returns that should be available to the market. Research limitations/implications – Future research should investigate the linkages between late reporting by directors and disadvantages to outside shareholders and the implementation of internal policies implemented to mitigate insider trading. Practical implications – Market participants should remain vigilant regarding the potential for late/non‐reporting of directors' trades. Originality/value – Uncovering breaches of reporting regulations are particularly important given that directors tend to purchase (sell) shares when the price is low (high), thereby achieving abnormal returns.

The conundrum of phoenix activity: Is further reform necessary?

Phoenix activity presents a conundrum for the law and its regulators. While there is economic cost associated with all phoenix activity, the underlying behaviour is not always illegal. A transaction with indicators of phoenix activity may be an entirely innocent and well-intentioned display of entrepreneurial spirit, albeit one that has ended in failure. Restructuring post business failure is not illegal per se. Recent reforms targeting phoenix activity fail to grapple with the vast range of behaviour that can be described as phoenix activity since they do not differentiate between legal and illegal activity. This article explores the importance of the distinction between legal and illegal phoenix activity, the extent to which the existing law captures a range of behaviour that can be described as illegal phoenix activity and the response of key regulators and governmental bodies to the absence of single law that attempts to define illegal phoenix activity.

Social Audit for raising CSR Performance of Banking Corporations in Bangladesh

Corporations' commitment to their social responsibilities has long been a global concern with reference to sustainability, transparency and fair practice, which is of great concern to stakeholders. Corporations are expected to be responsible to the society they operate within and do business in a socially responsible manner.

Enterprise technology governance: New information and technology core competencies for boards of directors

Boards of directors have legal and ethical responsibilities to be competent. Yet, in a world where business models and whole sectors are being disrupted by rapid information and technology change, a majority of directors lack IT governance knowledge and skills. Individual IT competency and collective board Enterprise Technology Governance capability is a global problem. Without capability, boards are potentially flying blind, and risk is increased and opportunities to lead and govern digital transformation lost. To address this capability gap, this research provides the first multi-industry validated Enterprise Technology Governance competency set for use in board evaluation, recruitment and professional development.

Directors and officers insurance – Recent critical issues in Australia and New Zealand

Directors and Officers Liability Insurance (“D&O insurance”) has grown and evolved rapidly over the past 80 years to assume an important position in most corporations’ corporate governance and risk management strategies. This article focuses upon certain topical matters of particular concern to directors and officers including the availability of defence costs where a D&O policy is subject to a statutory charge; the commercial desirability of stand-alone “A-side” coverage, being the cover provided directly to directors and officers for loss resulting from claims made against them for wrongful acts; the impact of fraud and/or dishonesty upon D&O cover; and disclosure of the nature and extent of D&O cover to the directors and officers themselves and to third parties – in the latter case such access frequently being necessary to determine the economic viability of pursuing a proposed action against a company and its directors and officers.

Governance of enterprise Information and Technology: A new core competency for boards of directors

With the level of digital disruption that is affecting businesses around the globe, you might expect high levels of Governance of Enterprise Information and Technology (GEIT) capability within boards. Boards and their senior executives know technology is important. More than 90% of boards and senior executives currently identify technology as essential to their current businesses, and to their organization’s future. But as few as 16% have sufficient GEIT capability. Global Centre for Digital Business Transformation’s recent research contains strong indicators of the need for change. Despite board awareness of both the likelihood and impact of digital disruption, things digital are still not viewed as a board-level matter in 45% of companies. And, it’s not just the board. The lack of board attention to technology can be mirrored at senior executive level as well. When asked about their organization’s attitude towards digital disruption, 43% of executives said their business either did not recognise it as a priority or was not responding appropriately. A further 32% were taking a “follower” approach, a potentially risky move as we will explain. Given all the evidence that boards know information and technology (I&T***) is vital, that they understand the inevitably, impact and speed of digital change and disruption, why are so many boards dragging their heels? Ignoring I&T disruption and refusing to build capability at board level is nothing short of negligence. Too many boards risk flying blind without GEIT capability [2]. To help build decision quality and I&T governance capability, this research: • Confirms a pressing need to build individual competency and cumulative, across-board capability in governing I&T • Identifies six factors that have rapidly increased the need, risk and urgency • Finds that boards may risk not meeting their duty of care responsibilities when it comes to I&T oversight • Highlights barriers to building capability details three GEIT competencies that boards and executives can use for evaluation, selection, recruitment and professional development.

Leading Digital Transformation: Building Technology and Information Governance Capability in Boards of Directors and the C-Suite

Information and technology and its use in organisation transformation presents unprecedented opportunities and risks. Increasingly, the Governance of Enterprise Information and Technology (GEIT) competency in the board room and executive is needed. Whether your organization is small or large, public, private or not for profit or whether your industry is not considered high-tech, IT is impacting your sector – no exceptions. But there is a skill shortage in boards: GEIT capability is concerningly low. This capability is urgently needed across the board, including those directors who come from finance, legal, marketing, operations and HR backgrounds. Digital disruption also affects all occupations. Putting in place a vision will help ensure emergency responses will meet technology-related duty of care responsibilities. When GEIT-related forward thinking and planning is carried out at the same time that you put your business strategy and plan in place, your organization has a significantly increased chance of not only surviving, but thriving into the future. Those organizations that don’t build GEIT capability risk joining the growing list of once-leading firms left behind in the digital ‘cloud of smoke’. Those organizations that do will be better placed to reap the benefits and hedge against the risks of a digital world. This chapter provides actionable, research-based considerations and processes for boards to use, to build awareness, knowledge and skills in governing technology-related organization strategy, risk and value creation.

Geek goddesses go to school : A study of female pre-service teachers in information technology courses

Various reasons have been proffered for female under-representation in tertiary information technology (IT) courses and the IT industry with most relating to cultural moirés. The 2006 Geek Goddess calendar was designed to alter IT’s “geeky image” and the term is used here to represent young women enrolled in pre-service IT teaching courses. Their special mix of IT and teaching draws on conflicting stereotypes and represents a micro-climate which is typically lost in studies of IT occupations because of the aggregation of all IT roles. This paper will report on a small-scale investigation of female students (N=25) at a university in Queensland (Australia) studying to become teachers of secondary IT subjects. They are entering the IT industry, gendered as a “male” occupation, through the safe space of teaching a discipline allied to feminine qualities of nurturing. They are “geek goddesses” who – perhaps to balance the masculine and feminine of these occupations - have decided to go to school rather than into corporations or government.

Regulating Multi-National Corporations Through State-Based Laws : Problems with Enforcing Human Rights Under The Alien Tort Statute

Under the Alien Tort Statute United States of America (“America”) Federal Courts have the jurisdiction to hear claims for civil wrongs, committed against non-American citizens, which were perpetrated outside America’s national borders. The operation of this law has confronted American Federal Courts with difficulties on how to manage conflicts between American executive foreign policy and judicial interpretations of international law. Courts began to pass judgment over conduct which was approved by foreign governments. Then in 2005 the American Supreme Court wound back the scope of the Alien Tort Statute. This article will review the problems with the expansion of the Alien Tort Statute and the reasons for its subsequent narrowing.

Engineering a financial bloodbath: how sub-prime securitization destroyed the legitimacy of financial capitalism

"This book investigates the origins and implications of the securitization crisis, described by the chief executive of ANZ as a "financial services bloodbath". Based on extensive interviews it offers an integrated series of case studies drawn from the United States, the United Kingdom and Australia. A central purpose is to not only chart what went wrong with the investment houses and why the regulatory systems failed, but also provide policy guidance. The book therefore combines the empirical with the normative. In so doing, it provides a route map to navigate one of the most significant financial and regulatory failures in modern times."

Towards a model of the institutional logics of climate change

The proliferation of innovative schemes to address climate change at international, national and local levels signals a fundamental shift in the priority and role of the natural environment to society, organizations and individuals. This shift in shared priorities invites academics and practitioners to consider the role of institutions in shaping and constraining responses to climate change at multiple levels of organisations and society. Institutional theory provides an approach to conceptualising and addressing climate change challenges by focusing on the central logics that guide society, organizations and individuals and their material and symbolic relationship to the environment. For example, framing a response to climate change in the form of an emission trading scheme evidences a practice informed by a capitalist market logic (Friedland and Alford 1991). However, not all responses need necessarily align with a market logic. Indeed, Thornton (2004) identifies six broad societal sectors each with its own logic (markets, corporations, professions, states, families, religions). Hence, understanding the logics that underpin successful –and unsuccessful– climate change initiatives contributes to revealing how institutions shape and constrain practices, and provides valuable insights for policy makers and organizations. This paper develops models and propositions to consider the construction of, and challenges to, climate change initiatives based on institutional logics (Thornton and Ocasio 2008). We propose that the challenge of understanding and explaining how climate change initiatives are successfully adopted be examined in terms of their institutional logics, and how these logics evolve over time. To achieve this, a multi-level framework of analysis that encompasses society, organizations and individuals is necessary (Friedland and Alford 1991). However, to date most extant studies of institutional logics have tended to emphasize one level over the others (Thornton and Ocasio 2008: 104). In addition, existing studies related to climate change initiatives have largely been descriptive (e.g. Braun 2008) or prescriptive (e.g. Boiral 2006) in terms of the suitability of particular practices. This paper contributes to the literature on logics by examining multiple levels: the proliferation of the climate change agenda provides a site in which to study how institutional logics are played out across multiple, yet embedded levels within society through institutional forums in which change takes place. Secondly, the paper specifically examines how institutional logics provide society with organising principles –material practices and symbolic constructions– which enable and constrain their actions and help define their motives and identity. Based on this model, we develop a series of propositions of the conditions required for the successful introduction of climate change initiatives. The paper proceeds as follows. We present a review of literature related to institutional logics and develop a generic model of the process of the operation of institutional logics. We then consider how this is applied to key initiatives related to climate change. Finally, we develop a series of propositions which might guide insights into the successful implementation of climate change practices.

Frameworks in regulating company directors : rethinking the philosophical foundations to enhance accountability

Sets out a system of corporate governance regulation, aimed at combining legal and social methods of governing director behaviour and at creating a framework flexible enough to accommodate different business and ethical cultures. Outlines the theoretical basis of corporate governance and the broad responsibilities of directors, and discusses the extent to which they can and should be regulated. Discusses the constitution of a regulatory framework encompassing law, soft law and best practice, and ethics.