The application of the statutory derivative action in Pt 2F.1A of the Corporations Act to companies in liquidation under Ch 5 : Well oiled machine or is Pt 2F.1A in need of a tune up?

The statutory derivative action was introduced in Australia in 2000. This right of action has been debated in the literature and introduced in a number of other jurisdictions as well. However, it is by no means clear that all issues have been resolved despite its operation in Australia for over 10 years. This article considers the application of Pt 2F.1A of the Corporations Act to companies in liquidation under Ch 5. It demonstrates that the application involves consideration of not only proper statutory interpretation but also policy matters around the role and the supervision by the court of a liquidator once a company has entered liquidation.

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 impact of the Malaysian code on corporate governance: compliance, institutional investors and stock performance

In 2001, the Malaysian Code on Corporate Governance (MCCG) became an integral part of the Bursa Malaysia Listing Rules, which requires all listed firms to disclose the extent of compliance with the MCCG. Our panel analysis of 440 firms from 1999 to 2002 finds that corporate governance reform in Malaysia has been successful, with a significant improvement in governance practices. The relationship between ownership by the Employees Provident Fund (EPF) and corporate governance has strengthened during the period subsequent to the reform, in line with the lead role taken by the EPF in establishing the Minority Shareholders Watchdog Group. The implementation of MCCG has had a substantial effect on shareholders' wealth, increasing stock prices by an average of about 4.8%. Although there is no evidence that politically connected firms perform better, political connections do have a significantly negative effect on corporate governance, which is mitigated by institutional ownership.

Experimental and finite element analysis of a double strap joint between steel plates and normal modulus CFRP

Strengthening of steel structures using externally-bonded carbon fibre reinforced polymers ‘CFRP’ is a rapidly developing technique. This paper describes the behaviour of axially loaded flat steel plates strengthened using carbon fibre reinforced polymer sheets. Two steel plates were joined together with adhesive and followed by the application of carbon fibre sheet double strap joint with different bond lengths. The behaviour of the specimens was further investigated by using nonlinear finite element analysis to predict the failure modes and load capacity. In this study, bond failure is the dominant failure mode for normal modulus (240 GPa) CFRP bonding which closely matched the results of finite elements. The predicted ultimate loads from the FE analysis are found to be in good agreement with experimental values.

Crisis preparedness of construction companies

In high-risk industries, companies with well-conceived crisis management plans are at a commercial advantage. While there is some understanding of the risk management practices of construction companies, there is little insight into their crisis preparedness. This paper presents the findings of exploratory research that investigated this issue. Using a diagnostic model of crisis preparedness that has been developed and tested across a broad range of industries, it concludes that if the sample surveyed is typical, then corporate philosophies in construction companies do not support crisis management activities. Furthermore, crisis planning is rudimentary and undertaken in an insular, informal, fragmented fashion, supported by few resources and little strategic guidance. Consequently, many construction companies will have an inadequate understanding of their crisis exposure, of how to cope with crises when they happen, and of how to learn and recover from their aftermath.

Conceptualisation of articular cartilage as a giant reverse micelle: A hypothetical mechanism for joint biocushioning and lubrication

Phospholipid (PL) molecules form the main structure of the membrane that prevents the direct contact of opposing articular cartilage layers. In this paper we conceptualise articular cartilage as a giant reverse micelle (GRM) in which the highly hydrated three-dimensional network of phospholipids is electrically charged and able to resist compressive forces during joint movement, and hence loading. Using this hypothetical base, we describe a hydrophilic-hydrophilic (HL-HL) biopair model of joint lubrication by contacting cartilages, whose mechanism is reliant on lamellar cushioning. To demonstrate the viability of our concept, the electrokinetic properties of the membranous layer on the articular surface were determined by measuring via microelectrophoresis, the adsorption of ions H, OH, Na and Cl on phospholipid membrane of liposomes, leading to the calculation of the effective surface charge density. The surface charge density was found to be -0.08 ± 0.002 cm-2 (mean ± S.D.) for phospholipid membranes, in 0.155 M NaCl solution and physiological pH. This value was approximately five times less than that measured in 0.01 M NaCl. The addition of synovial fluid (SF) to the 0.155 M NaCl solution reduced the surface charge density by 30% which was attributed to the binding of synovial fluid macromolecules to the phospholipid membrane. Our experiments show that particles charge and interact strongly with the polar core of RM. We demonstrate that particles can have strong electrostatic interactions when ions and macromolecules are solubilized by reverse micelle (RM). Since ions are solubilized by reverse micelle, the surface entropy influences the change in the charge density of the phospholipid membrane on cartilage surfaces. Reverse micelles stabilize ions maintaining equilibrium, their surface charges contribute to the stability of particles, while providing additional screening for electrostatic processes. © 2008 Elsevier Ireland Ltd. All rights reserved.