Performance Benchmarking of Australian Business Regulation : Submission to the Productivity Commission

The need to “reduce red tape” and regulatory inconsistencies is a desirable outcome (OECD 1997) for developed countries. The costs normally associated with regulatory regimes are compliance costs and direct charges. Geiger and Hoffman (1998) have noted that the extent of regulation in an industry tends to be negatively associated with firm performance. Typically, approaches to estimation of the cost of regulations examine direct costs, such as fees and charges, together with indirect costs, such as compliance costs. However, in a fragmented system, such as Australia, costs can also be incurred due to procedural delays, either by government, or by industry having to adapt documentation for different spheres of government; lack of predictable outcomes, with variations occurring between spheres of government and sometimes within the same government agency; and lost business opportunities, with delays and red tape preventing realisation of business opportunities (OECD 1997). In this submission these costs are termed adaptation costs. The adaptation costs of complying with variations in regulations between the states has been estimated by the Building Product Innovation Council (2003) as being up to $600 million per annum for building product manufacturers alone. Productivity gains from increased harmonisation of the regulatory system have been estimated in the hundreds of millions of dollars (ABCB 2003). This argument is supported by international research which found that increasing the harmonisation of legislation in a federal system of government reduces what we have termed adaptation costs (OECD 2001). Research reports into the construction industry in Australia have likewise argued that improved consistency in the regulatory environment could lead to improvements in innovation (PriceWaterhouseCoopers 2002), and that research into this area should be given high priority (Hampson & Brandon 2004). The opinion of industry in Australia has consistently held that the current regulatory environment inhibits innovation (Manley 2004). As a first step in advancing improvements to the current situation, a summary of the current costs experienced by industry needs to be articulated. This executive summary seeks to outline these costs in the hope that the Productivity Commission would be able to identify the best tools to quantify the actual costs to industry.

A responsive sanction to promote systematic compliance? Enforceable undertakings in occupational health and safety regulation

This article examines the use of enforceable undertakings in Australian occupational health and safety (OHS) regulation. Enforceable undertakings are promises by persons alleged to have breached their regulatory obligations to do something, which if not done, is enforceable in court. Enforceable undertakings potentially have an important responsive and restorative role to play in a regulatory enforcement strategy to ensure compliance with OHS statutes, and have been used in other areas of business regulation, including trade practices, financial, prudential, consumer, civil aviation, environmental and communications and media regulation. The article then reports on a study of the operation of enforceable undertakings in Queensland to enforce compliance with OHS obligations. We conclude that this early experience of enforceable undertakings in Queensland provides useful guidance as to how the enforceable undertaking provisions might best be implemented elsewhere, and preliminary evidence of the complexities of their likely effectiveness in OHS regulation.

Corporate governance and compliance : preventative measure or just another fad?

In the wake of recent corporate collapses, 'corporate governance' has received unprecedented levels of attention. It can be narrowly defined as how a company is directed and steered. The responsibility of steering a company is entrusted with the board of directors, who become the focus of governance mechanisms.Yet this is not as straightforward as it appears - Australia has experienced massive shifts in business regulations over the past two decades. One innovation in Australian business regulation is 'enforced self-regulation' which combines the benefits of voluntary self-regulation with the coercive power of the State, implemented via a compliance program. A possible hazard of compliance system is that management might treat this responsibility as a 'box ticking' exercise. Therefore effective governance and compliance entails more than setting up internal and regulatory mechanisms; the willingness of various stakeholders to collaborate is crucial. This suggests that managing relationships between stakeholders of an organization is the key to averting corporate collapses.

Corporate Social Responsibility Implementation in the EU and USA : The Trend and the Way Forward

The core principles of CSR are being integrated into the core policy objectives of different economies and global companies and are also moving beyond their individual business initiatives. This integration can be seen from individual states’ perspectives; states are also accepting these issues in their socio-economic strategies and thus are establishing these issues within national economies. Given this background, this chapter explicates the trends in implementing CSR principles in the EU and USA. It demonstrates that companies in the developed countries use a mix of different strategies to incorporate CSR principles in their self-regulatory mechanisms. Strategies based on legal regulation are not foremost in this mix; rather, in these countries regulation-based strategy is meant to assist the non-legal drivers of CSR.

Meta-regulation approach of law : a potential legal strategy to develop socially responsible business self-regulation in least developed common law countries

In the corporate regulation landscape, 'meta-regulation' is a comparatively new legal approach. The sketchy role of state promulgated authoritative laws in pluralized society and scepticism in corporate self-regulation's role have resulted in the development of this legal approach. It has opened up possibilities to synthesize corporate governance to add social values in corporate self-regulation. The core of this approach is the fusion of responsive and reflexive legal strategies to combine regulators and regulatees for reaching a particular goal. This paper argues that it is a potential strategy that can be successfully deployed to develop a socially responsible corporate culture for the business enterprises, so that they will be able to acquire social, environmental and ethical values in their self-regulation sustainably. Taking Bangladeshi corporate laws as an instance, this paper also evaluates the scope of incorporating this approach in laws of the least developed common law countries in general.

Unincorporated associations as entities : a matter of balance between regulation and facilitation?

Small non-profit organisations play a vital role in the creation of social capital and resilience of civil society in Australia. A number of government inquiries have recently been commissioned to propose reform to non-profit enterprise and it is timely to examine the suitability of legal structures available for small non-profit organisations. This article reviews the characteristics of small Australian non-profit organisations and the legal treatment of similar associations in New Zealand, the United Kingdom, Europe, Canada and United States to inform possible reform strategies. Reforms are then proposed for small Australian unincorporated organisations which allow them access to the benefits of separate legal entity status, but with regulation proportionate to the risks posed to the broader community.

Preliminary review of over-regulation in Australian financial services

This article examines a preliminary review and the limited evidence of over-regulation in Australian financial services. The 1997 Wallis Report and the CLERP 6 paper resulted in the amendments to Ch 7 of the Corporations Act 2001 (Cth) by the Financial Services Reform Act. Nearly a decade later the system based upon 'one-size fits all' dual track regime and a consistent licensing regime has greatly increased the costs of compliance. In the area of enforcement there has not been a dramatic change to the effective techniques applied by ASIC over other agencies such as APRA. In particular there are clear economic arguments, as well as international experiences which state that a single financial services regulator is more effective than the multi-layered approach adopted in Australia. Finally, in the superannuation area of financial services, which is worth A$800 billion there is unnecessary dual licensing and duplicated regulation with little evidence of any consumer-member benefit but at a much greater cost

China's Creative Industries : Copyright, Social Network Markets and the Business of Culture in a Digital Age

China’s Creative Industries explores the role of new technologies, globalization and higher levels of connectivity in re-defining relationships between ‘producers’ and ‘consumers’ in 21st century China. The evolution of new business models, the impact of state regulation, the rise of entrepreneurial consumers and the role of intellectual property rights are traced through China’s film, music and fashion industries. The book argues that social network markets, consumer entrepreneurship and business model evolution are driving forces in the production and commercialization of cultural commodities. In doing so it raises important questions about copyright’s role in the business of culture, particularly in a digital age.

The regulation of insurance intermediaries in the Australian financial services market

The insurance industry discharges a critical role in the Australian economy and is a significant part of the Australian financial services market. The industry relies upon intermediaries, the principal types being brokers and agents, to promote, arrange and distribute their products and services in the market. The pivotal role that they play in this context and sensitivities associated with the consumer oriented products, such as house and contents insurance, has ensured close regulatory attention. Of particular importance was the passage of the Insurance (Agents and Brokers) Act 1984 (Cth), a comprehensive attempt to address the responsibilities of intermediaries as well as particular problem areas associated with the handling of money. However, with the introduction of financial services and market reform early in the new millennium this insurance intermediary specific regulatory approach was abandoned in favour of a market-wide strategy; that is, market reform was based upon across-the-board licensing, disclosure, conduct and fairness standards, and all financial products and services are now regulated at a generic level under Ch 7 of the Corporations Act 2001 (Cth). This article briefly explores the categories of insurance intermediaries and the relevant distinctions between them but focuses mainly upon the regulatory context in which they operate. This context transcends a strictly legal framework as the regulatory body, the Australian Securities and Investments Commission (ASIC), has sought to inform and guide the market through Policy Statements and Regulatory Guides. The usefulness of these guides as an adjunct to the legislation in explaining the scope and operation of regulatory framework is examined. In addition, the article looks at the self-regulatory and dispute resolution practices in this area and their impact. In conclusion an assessment of this across-the-board regulatory regime is advanced.

Feedback information and consumer motivation : the moderation role of positive and negative reference values in self-regulation

Marketers spend considerable resources to motivate people to consume their products and services as a means of goal attainment (Bagozzi and Dholakia, 1999). Why people increase, decrease, or stop consuming some products is based largely on how well they perceive they are doing in pursuit of their goals (Carver and Scheier, 1992). Yet despite the importance for marketers in understanding how current performance influences a consumer’s future efforts, this topic has received little attention in marketing research. Goal researchers generally agree that feedback about how well or how poorly people are doing in achieving their goals affects their motivation (Bandura and Cervone, 1986; Locke and Latham, 1990). Yet there is less agreement about whether positive and negative performance feedback increases or decreases future effort (Locke and Latham, 1990). For instance, while a customer of a gym might cancel his membership after receiving negative feedback about his fitness, the same negative feedback might cause another customer to visit the gym more often to achieve better results. A similar logic can apply to many products and services from the use of cosmetics to investing in mutual funds. The present research offers managers key insights into how to engage customers and keep them motivated. Given that connecting customers with the company is a top research priority for managers (Marketing Science Institute, 2006), this article provides suggestions for performance metrics including four questions that managers can use to apply the findings.