The new governance approach to the devolution of corporate governance

The moral arguments associated with justice, fairness and communitarianism have rejected the exclusivity of cost‐benefit analysis in corporate governance. Particularly, the percepts of new governance (NG) have included distributive aspects in efficiency models focused on maximizing profits. While corporate directors were only assigned to look after the return of investment within the traditional framework of corporate governance (CG), NG has created the scope for them to look beyond the set of contractual liabilities. This article explores how and how far NG notions have contributed to the devolution of CG to create internal strategies focusing on actors, ethics and accountability in corporate self-regulation.

On the perspectives of the implementation of 'corporate social responsibility'

In the face of changes in corporate regulation scholarship, the percepts of corporate governance and legal policies have minimized the controversies over the potentials and limitations of corporate accountability mechanisms. In the contemporary scholarly works on the implementation of corporate social responsibility (CSR), there are evidences that support CSR principles to be implemented through legal regulation. Scholars and current practices, however, emphasize that this implementation should not be based on any single strategy. From this perspective, this article argues that the regulatory strategies for this implementation should be based on a fusion of legal sanction, market incentives and the demand of private ordering.

Raising corporate social responsibility - The 'legitimacy' approach

Discussing the normative arguments for the development of corporate social responsibility (CSR) is difficult but important. It is difficult/ as any argument for this development could be detrimental if it seems that it could narrow the scope of innovation in business and becomes a barrier to companies' usual business cases. It is important, as the civil society actors need the theoretical basis to further the instances of corporate irresponsibility to societies in an articulated way. Given this background, this article presents a detailed discussion on the 'legitimacy' argument as a normative basis for rising CSR. It is an analysis that runs counter to the functionalist economic arguments that mostly focus on the financial stakeholders and consider only the (allegedly free) 'market' outcomes.

Statutory-backed continuous disclosure regime and corporate disclosure behaviour : does corporate governance matter?

Since 1 December 2002, the New Zealand Exchange’s (NZX) continuous disclosure listing rules have operated with statutory backing. To test the effectiveness of the new corporate disclosure regime, we compare the change in quantity of market announcements (overall, non-routine, non-procedural and external) released to the NZX before and after the introduction of statutory backing. We also extend our study in investigating whether the effectiveness of the new corporate disclosure regime is diminished or augmented by corporate governance mechanisms including board size, providing separate roles for CEO and Chairman, board independence, board gender diversity and audit committee independence. Our findings provide a qualified support for the effectiveness of the new corporate disclosure regime regarding the quantity of market disclosures. There is strong evidence that the effectiveness of the new corporate disclosure regime was augmented by providing separate roles for CEO and Chairman, board gender diversity and audit committee independence, and diminished by board size. In addition, there is significant evidence that share price queries do impact corporate disclosure behaviour and this impact is significantly influenced by corporate governance mechanisms. Our findings provide important implications for corporate regulators in their quest for...

Corporate governance and risk management : the role of risk management and compensation committees

This paper examines the role of compensation and risk committees in managing and monitoring the risk behaviour of Australian financial firms in the period leading up to the global financial crisis (2006–2008). This empirical study of 711 observations of financial sector firms demonstrates how the coordination of risk management and compensation committees reduces information asymmetry. The study shows that the composition of the risk and compensation committees is positively associated with risk, which, in turn, is associated with firm performance. More importantly, information asymmetry is reduced when a director is a member of both the risk and compensation committees which moderate the negative association between risk and firm performance for firms with high risk.

Convergence of corporate social responsibility and corporate governance in weak economies : the case of Bangladesh

The convergence of corporate social responsibility (CSR) and corporate governance (CG) has changed the corporate accountability mechanism. This has developed a socially responsible ‘corporate self-regulation’, a synthesis of governance and responsibility in the companies of strong economies. However, unlike in the strong economies, this convergence has not been visible in the companies of weak economies, where the civil society groups are unorganised, regulatory agencies are either ineffective or corrupt and the media and non-governmental organisations do not mirror the corporate conscience. Using the case of Bangladesh, this article investigates the convergence between CSR and CG in the self-regulation of companies in a less vigilant environment.

Statutory-backed continuous disclosure regime and corporate disclosure behaviour : does corporate governance matter?

Since 1 December 2002, the New Zealand Exchange’s (NZX) continuous disclosure listing rules have operated with statutory backing. To test the effectiveness of the new corporate disclosure regime, we compare the change in quantity of market announcements (overall, non-routine, non-procedural and external) released to the NZX before and after the introduction of statutory backing. We also extend our study in investigating whether the effectiveness of the new corporate disclosure regime is diminished or augmented by corporate governance mechanisms including board size, providing separate roles for CEO and Chairman, board independence, board gender diversity and audit committee independence. Our findings provide a qualified support for the effectiveness of the new corporate disclosure regime regarding the quantity of market disclosures. There is strong evidence that the effectiveness of the new corporate disclosure regime was augmented by providing separate roles for CEO and Chairman, board gender diversity and audit committee independence, and diminished by board size. In addition, there is significant evidence that share price queries do impact corporate disclosure behaviour and this impact is significantly influenced by corporate governance mechanisms. Our findings provide important implications for corporate regulators in their quest for a superior disclosure regime.

Ownership, corporate governance and timeliness of price discovery : Australian evidence

This study investigates whether and how a firm’s ownership and corporate governance affect its timeliness of price discovery, which is referred to as the speed of incorporation of value-relevant information into the stock price. Using a panel data of 1,138 Australian firm-year observations from 2001 to 2008, we predict and find a non-linear relationship between ownership concentration and the timeliness of price discovery. We test the identity of the largest shareholder and find that only firms with family as the largest shareholder exhibit faster price discovery. There is no evidence that suggests that the presence of a second largest shareholder affects the timeliness of price discovery materially. Although we find a positive association between corporate governance quality and the timeliness of price discovery, as expected, there is no interaction effect between the largest shareholding and corporate governance in relation to the timeliness of price discovery. Further tests show no evidence of severe endogeneity problems in our study.

Australia's mining interests within Nigeria and Libya : policies, corruption and conflict

Crude petroleum remains the single most imported commodity into Australia and is sourced from a number of countries around the world (Department of Foreign Affairs and Trade (DFAT), 2011a). While interest in crude petroleum is widespread, in recent years Australia's focus has been drawn to the continent of Africa, where increased political stability, economic recovery and an improved investment climate has made one of the largest oil reserves in the world increasingly more attractive. Despite improvement across the continent, there remain a number of risks which have the potential to significantly damage Australia's economic interests in the petroleum sector,including government policies and legislation, corruption and conflict. The longest exporters of crude petroleum products to Australia – Nigeria and Libya – have been subject to these factors in recent years and, accordingly, are the focus of this paper. Once identified, the impact of political instability, conflict, government corruption and other risk factors to Australia's mining interests within these countries is examined, and efforts to manage such risks are discussed.

Preventing public sector corruption : the relationship between parliamentary committees and corruption commissions

Parliamentary committees fulfil several important functions within the Parliament, with one of these being the oversight of various agencies including those that are designed to reduce corruption within the police service and other public sector agencies. The cross-party nature of committees combined with the protections of Parliament make them powerful agencies. Prenzler & Faulkner (2010) suggest that the ideal system for an agency that has oversight of a public sector integrity commission should include monitoring by a parliamentary committee, with an inspector attached to the committee. This occurs in Queensland, New South Wales and Western Australia. There has been very little research conducted on the role of parliamentary committees with oversight responsibilities for public sector integrity agencies. This paper will address this gap by examining the relationship between a parliamentary committee, a parliamentary inspector and a corruption commission. Queensland’s Parliamentary Crime and Misconduct Committee (PCMC/the Committee) and the Parliamentary Crime and Misconduct Commissioner (the Commissioner) provide oversight of the Crime and Misconduct Commission (CMC). By focussing on the PCMC and the Commissioner, the paper will examine the legislative basis for the Committee and Commissioner and their respective roles in providing oversight of the CMC. One key method by which the PCMC provides oversight of the CMC is to conduct and publish a review of the CMC every three years. Additionally, the paper will identify some of the similarities and differences between the PCMC and other committees that operate within the Queensland Parliament. By doing so, the paper will provide insights into the relationships that exist between corruption commissions, parliamentary committees and parliamentary inspectors and demonstrate the important role of the parliamentary committee in preventing instances of public sector corruption.

Legal Regulation of Corporate Social Responsibility : A Meta-Regulation Approach of Law for Raising CSR in a Weak Economy

"Even though Corporate Social Responsibility (CSR) has become a widely accepted concept promoted by different stakeholders, business corporations' internal strategies, known as corporate self-regulation in most of the weak economies, respond poorly to this responsibility. Major laws relating to corporate regulation and responsibilities of these economies do not possess adequate ongoing influence to insist on corporate self-regulation to create a socially responsible corporate culture. This book describes how the laws relating to CSR could contribute to the inclusion of CSR principles at the core of the corporate self-regulation of these economies in general, without being intrusive in normal business practice. It formulates a meta-regulation approach to law, particularly by converging patterns of private ordering and state control in contemporary corporate law from the perspective of a weak economy. It proposes that this approach is suitable for alleviating regulators' limited access to information and expertise, inherent limitations of prescriptive rules, ensuring corporate commitment, and enhance the self-regulatory capacity of companies. This book describes various meta-regulation strategies for laws to link social values to economic incentives and disincentives, and to indirectly influence companies to incorporate CSR principles at the core of their self-regulation strategies. It investigates this phenomenon using Bangladesh as a case study."--publisher website