Sustainability and mandatory disclosure in Queensland : an assessment of the impact on home buyer patterns

Sustainability Declarations were introduced by the Queensland State Government on 1 January 2010 as a compulsory measure for all dwelling sales. The purpose of this policy decision was to improve the relevance of sustainability in the home ownership decision making process. This paper assesses the initial impact of this initiative over its first year in operation. In partnership with the Real Estate Institute of Queensland, real estate agents and salespeople in Queensland were surveyed to determine what impact the Sustainability Declaration has had on home buyer decision making. The level of compliance by the real estate industry was also reviewed. These preliminary findings indicate a high level of compliance from the real estate industry, however results confirm that sustainability is yet to become a criterion of relevance to the majority of home buyers in Queensland. The Sustainability Declarations are a first step in raising awareness in home owners of the importance of sustainability in housing. Further monitoring of this impact will be carried out over time.

Home sustainability policy and mandatory disclosure. a survey of buyer and seller participation and awareness in Qld

Sustainability Declarations were introduced by the Queensland State Government on 1 January 2010 as a mandatory disclosure measure for all dwelling sales in the State. The purpose of this paper is to assess the impact this policy decision has had in the homebuyer decision-making process in the first year since its introduction and to consider the effectiveness of the legislation in meeting its policy objectives. This quantitative research comprised a two-part process: the first stage surveyed the level of compliance by the real estate industry with the legislative requirements. Stage two comprised an online survey of Real Estate Institute of Queensland members to determine what impact the Sustainability Declaration has had on home buyer decision making and how effective the legislative mechanisms have been in achieving the policy objectives. This paper assesses the initial impact of this initiative over its first year in operation. These preliminary findings indicate a high level of compliance from the real estate industry, however results confirm that sustainability is yet to become a criterion of relevance to the majority of homebuyers in Queensland. These quantitative findings support anecdotal evidence that the objectives of the legislation to increase homebuyer awareness and relevance of sustainability issues in the home are not being achieved. Sustainability Declarations are a first step in raising homebuyer awareness of the importance of sustainability in housing. Further monitoring of this impact will be carried out over time. This is the first research undertaken to assess the impact of this new mandatory disclosure legislation in Queensland, Australia. The findings will inform policy makers and assist them to assess the effectiveness of the current legislation in achieving its policy objectives.

Audit committee effectiveness in a mandatory disclosure environment

This study examines audit committee effectiveness in its association with regulatory compliance in a highly sanctioned environment. It uses the Australian continuous disclosure regime to investigate whether audit committee effectiveness is associated with a higher frequency of disclosures, thereby enhancing the efficiency of the capital market and creating more informed individual investors. The findings show that, as hypothesised, audit committee effectiveness measured as an index composed of sub-components involving audit committee size, meeting frequency, independence, member financial literacy and membership of other audit committees, is positively associated with disclosure frequency. Further tests show that it is the financial literacy sub component which is most implicated in this relationship. Company size, years of listing, the proportion of inventories and receivables to total assets, whether or not the company has been involved in a takeover offer or bid or in changes to its number of shares are significant control variables.

Behavioural biases and information disclosure laws relating to residential property sales : narrowing the gap between existing laws and calls for future reforms

Market failures involving the sale of complex merchandise, such as residential property, financial products and credit, have principally been attributed to information asymmetries. Existing legislative and regulatory responses were developed having regard to consumer protection policies based on traditional economic theories that focus on the notion of the ‘rational consumer’. Governmental responses therefore seek to impose disclosure obligations on sellers of complex goods or products to ensure that consumers have sufficient information upon which to make a decision. Emergent research, based on behavioural economics, challenges traditional ideas and instead focuses on the actual behaviour of consumers. This approach suggests that consumers as a whole do not necessarily benefit from mandatory disclosure because some, if not most, consumers do not pay attention to the disclosed information before they make a decision to purchase. The need for consumer policies to take consumer characteristics and behaviour into account is being increasingly recognised by governments, and most recently in the policy framework suggested by the Australian Productivity Commission

Assessing the awareness and importance of housing sustainability in Queensland

Sustainability has been a major factor and determinant of commercial property design, construction, retro-fitting and landlord and tenant requirements over the last decade, supported by the introduction of rating tools such as NABERS and GreenStar and the recently mandated Building Energy Efficiency Certificate (BEEC). However, the movement to sustainable and energy efficient housing has not been established for the same period, and although mandatory building regulations have been in place for new residential housing construction since 2004, the requirement to improve the sustainability and energy efficiency of housing constructed prior to 2004 has not been mandatory. Residential dwelling energy efficiency and rating schemes introduced in Australia over the past decade have included rating schemes such as BASIX, NatHERS, First rate, ACTHERS, and Building Code of Australia and these have applied to new dwelling construction. At both National and State level the use of energy efficiency schemes for existing residential dwellings has been voluntary and despite significant cash incentives have not always been successful or achieved widespread take-up. In 2010, the Queensland Government regulated that all homes offered for sale, whether a new or existing dwellings require the seller to provide a ―sustainability declaration‖ that provides details of the sustainability measures associated with the dwelling being sold. The purpose of this declaration being to inform buyers and increase community awareness of home sustainability features. This paper uses an extensive review of real estate marketing material, together with a comprehensive survey of real estate agents to analyse the current market compliance, awareness and acceptance of existing green housing regulations and the importance that residential property owners and purchasers place on energy efficient and sustainable housing. The findings indicate that there is still little community awareness or concern of sustainable housing features when making home purchase decisions.

Have sustainability declarations impacted home buyer patterns?

The Queensland University of Technology recently surveyed REIQ members to determine what impact the sustainability declaration has had on home buyer decision-making in its first year of operation.

Interim financial reporting in the Asia-Pacific region

This study examines Interim Financial Reporting disclosure compliance and associated factors for listed firms in Asia-Pacific countries: Australia, Hong Kong, Malaysia, Singapore, the Philippines, Thailand, and Vietnam. Employing disclosure theory (in the context of information economics), with the central premise being that manager' trade-off costs and benefits relating to disclosure, the factors influencing the variation in interim reporting disclosure compliance are examined. Using researcher-constructed disclosure indices and regression modelling, the results reveal significant cross-country variation in interim reporting disclosure compliance, with higher compliance associated with IFRS adoption, audit review, quarterly reporting (rather than six-monthly) and shorter reporting lags.

The mandatory notification of data breaches : issues arising for Australian and EU legal developments

Public and private sector organisations are now able to capture and utilise data on a vast scale, thus heightening the importance of adequate measures for protecting unauthorised disclosure of personal information. In this respect, data breach notification has emerged as an issue of increasing importance throughout the world. It has been the subject of law reform in the United States and in other jurisdictions. This article reviews US, Australian and EU legal developments regarding the mandatory notification of data breaches. The authors highlight areas of concern based on the extant US experience that require further consideration in Australia and in the EU.

Notification of data breaches under the continuous disclosure regime

Consumer personal information is now a valuable commodity for most corporations. Concomitant with increased value is the expansion of new legal obligations to protect personal information. Mandatory data breach notification laws are an important new development in this regard. Such laws require a corporation that has suffered a data breach, which involves personal information, such as a computer hacking incident, to notify those persons who may have been affected by the breach. Regulators may also need to be notified. Australia currently does not have a mandatory data breach notification law but this may be about to change. The Australian Law Reform Commission has suggested that a data breach notification scheme be implemented through the Privacy Act 1988 (Cth). However, the notification of data breaches may already be required under the continuous disclosure regime stipulated by the Corporations Act 2001 (Cth) and the Australian Stock Exchange (ASX) Listing Rules. Accordingly, this article examines whether the notification of data breaches is a statutory requirement of the existing continuous disclosure regime and whether the ASX should therefore be notified of such incidents.

Mandatory auditor rotation : Australian evidence

A key part of the auditor independence reforms in Australia, as represented by Corporate Law Economic Reform Program (Audit Reform and Corporate Disclosure) Act 2004 (Cth) (CLERP 9), mandates audit partner rotation. The change was criticised predominantly due to the costs imposed on both the audit firms and the audit clients. This study examines the Australian experience post-CLERP 9 with mandated auditor rotation. Based on data of audit partner rotation over 2003–2009 (on average 1200 listed Australian companies over the sample period), we show that audit partner tenure sat at a median of 2–3 years, but that the maximum audit partner tenure was as high as 20 years in the pre-CLERP 9 period. For around 85% of the market, audit partner rotation occurred voluntarily at between 1–5 years. The interesting result is that for 15% of the market, the mandated audit partner rotation had a significant impact on corporate governance practice. There is also a greater observed impact of mandatory rotation on audit engagements involving the non-global auditing firms. These findings inform the debate as to the ‘costliness’ of the law reform.

Continuous disclosure compliance: Does corporate governance matter?

Our study investigates the quality of firms’ continuous disclosure compliance during mandatory continuous disclosure reform, and whether the compliance quality is impacted by corporate governance, using the New Zealand market as the setting. We use a novel coding of different categories of disclosures (nonroutine, non-procedural and internal), which represents the extent of proprietary insider information inherent in disclosures, to evaluate firms’compliance quality. Our findings provide evidence that firms’ compliance quality improved after the reform, and this improvement is inconsistently impacted by corporate gvernance. Our findings provide important implications for regulators in their quest for a superior disclosure regime

NFPOs and their anti-corruption disclosure practices: Evidence from Australia

By focusing on major Australian overseas aid not-for-profit organisations (NFPOs), this study has found that NFPOs’ public disclosures lack appropriate commentary relating to anti-corruption measures. We found that this could be due to a break down in regulatory oversight caused by a lack of mandatory reporting standards. This finding reinforces the experience of NFPOs in terms of addressing anti-corruption issues. The key lesson is that there is a need for significant improvement in the anti-corruption regulations, hence associated disclosure practices within the NFPOs sector.

Negotiating selves: exploring cultures of disclosure

If identity is a construct—and, more critically, a construct defined and developed through relationships with others in public and private spheres—then an understanding of the processes, mechanisms and platforms by which individuals disclose information about themselves is crucial in understanding the way identity, community and culture function, and the way individuals can intervene in the functioning of culture.

The effect of national governance codes on firm disclosure practices : evidence from analyst earnings forecasts

This study examines whether voluntary national governance codes have a significant effect on company disclosure practices. Two direct effects of the codes are expected: 1) an overall improvement in company disclosure practices, which is greater when the codes have a greater emphasis on disclosure; and 2) a leveling out of disclosure practices across companies (i.e., larger improvements in companies that were previously poorer disclosers) due to the codes new comply-or-explain requirements. The codes are also expected to have an indirect effect on disclosure practices through their effect on company governance practices. The results show that the introduction of the codes in eight East Asian countries has been associated with lower analyst forecast error and a leveling out of disclosure practices across companies. The codes are also found to have an indirect effect on company disclosure practices through their effect on board independence. This study shows that a regulatory approach to improving disclosure practices is not always necessary. Voluntary national governance codes are found to have both a significant direct effect and a significant indirect effect on company disclosure practices. In addition, the results indicate that analysts in Asia do react to changes in disclosure practices, so there is an incentive for small companies and family-owned companies to further improve their disclosure practices.