Multiple directorships and corporate performance in Australian listed companies

How many directorships are too many? Globally, normative advice emphasises the importance of limiting the number of directorships any individual should hold due to the workloads they entail. However, there is little empirical evidence to support this view. Rather, there is a strong tradition of supporting multiple directorships as a mechanism for the firm to co-opt external resources. To explore the issue of director workloads and multiple directorships, we first consider the issues related to multiple directorships and outline the conclusions of extant international and Australian studies into multiple directorships. We then detail our objectives in undertaking this research and our approach to data collection. Our findings indicate that the incidence of multiple directorships in Australian listed companies is low. We also find that many of the apparent examples of multiple directorships are due to related entities, which share common directors and, due to the nature of these entities, have much lower workload requirements. Further, there does not appear to be any relationship between holding multiple directorships and firm financial performance. Finally, we discuss the implications for boards and those interested in governance, particularly the need to ensure governance recommendations and guidelines reflect empirical findings. We offer one solution to address the concerns of boards, investors, other stakeholders and the community regarding multiple directorships: board and individual director evaluations.

A framework for diagnosing board effectiveness

Pressure on boards to improve corporate performance and management oversight has led to a series of inquiries and reports advocating governance reform. These reports largely reflect an agency perspective of governance and seek to ensure greater board independence from and control of management. While board independence is important to good governance, we contend that frameworks, models and advice centred on one element of governance ignore the complexity of how boards work. We develop a holistic board framework based upon the concept of board intellectual capital to address this concern. Our framework proposes a series of inputs (e.g. company history, company constitution, legal environment) that lead to a particular mix of board intellectual capital. We contend that the balance of the different elements of board intellectual capital will lead to a series of board behaviours. Further, the board needs to mobilise its intellectual capital to carry out a series of roles. The exact nature of these roles will depend on the company's requirements. Thus, the governance outputs of organisational performance, board effectiveness and director effectiveness will depend on the match between the board's intellectual capital and the roles required of it. We conclude by demonstrating the benefits of this framework as a diagnostic tool. We outline how boards wishing to improve their governance systems can diagnose common governance problems by evaluating their own board's capabilities in relation to the different components of the framework.

Restoration of degraded tropical forest landscapes

The current scale of deforestation in tropical regions and the large areas of degraded lands now present underscore the urgent need,for interventions to restore biodiversity, ecological functioning, and the supply of goods and ecological services previously used by poor rural communities. Traditional timber plantations have supplied some goods but have made only minor contributions to fulfilling most of these other objectives. New approaches to reforestation are now emerging, with potential for both overcoming forest degradation and addressing rural poverty.

The relationship between exchange rate exposure, currency risk management and performance of international equity funds

This paper assesses the currency risk management policies for a sample of Australian international equity trusts. The relevance of currency risk management is considered in the context of exchange rate exposure and performance measures. The study incorporates differing economic climates and particular emphasis is given to the Asian crisis in mid-1997. Our results indicate that a good proportion of funds do implement specific currency risk management policies. Furthermore, we find that for those funds managing currency risk, there is some evidence of a favourable impact on currency exposure and fund performance.

Growth performance and management of a mixed rainforest tree plantation

Monoculture plantations of Pinus, Eucalyptus and Acacia have been established oil rainforest lands throughout the world. However, this type of reforestation generally supplies low quality timber and contributes to landscape simplification. Alternatives to exotic monoculture plantations are now beginning to gain momentum with farmers and landholders attempting to establish a variety of rainforest trees in small plantations. When compared to the well studied commercial species, knowledge concerning the growth and management of many of these rainforest species is in its infancy. To help expand this limited knowledge base an experimental plantation of 16 rainforest tree species in a randomised design was established near Mt. Mee, in south-eastern Queensland, Australia. Changes in growth, form (based on stem straightness, branch size and branchiness), crown diameters and leaf area of each species were examined over 5 years. Patterns of height growth were also measured monthly for 31 months. Species in this trial could be separated into three groups based on their overall growth after 5 years and their growth patterns. Early successional status, low timber density, high maximum photosynthetic rates and large total leaf areas were generally correlated to rapid height growth. Several species (including Araucaria cunninghamii, Elaeocarpus grandis, Flindersia brayleyana, Grevillea robusta and Khaya nyasica) had above average form and growth, while all species in the trial had considerable potential to have increased productivity through tree selection. As canopy closure occurred at the site between years four and five, growth increments declined. To reduce stand competition a number of different thinning techniques could be employed. However, simple geometric or productivity based thinnings appear to be inappropriate management techniques for this mixed species stand as they would either remove many of the best performing trees or nearly half the species in the trial. Alternatively, a form based thinning would maintain the site's diversity, increase the average form of the plantation and provide some productivity benefits.

Corporate governance options for the local subsidiaries of multinational enterprises

While the corporate governance literature generally focuses on the parent legal entity, many organisations are now multinational enterprises (MNEs) with subsidiaries that are most often legal entities in their host countries. Despite the strengthening of corporate governance regimes internationally, the boards of these subsidiaries are in many instances perfunctory. This paper examines the question of whether developments in corporate governance theory and practice can add value for the local subsidiaries of MNEs. This paper provides a theoretical basis for evaluating governance models in MNEs. The paper commences with a review of the key concepts from the MNE and conglomerates literature with respect to core MNE strategies. The paper then discusses what the "governance roles" are that must be performed in MNE subsidiaries. We propose four governance frameworks for subsidiary corporations. These frameworks are: (1) Direct Control; (2) Dual Reporting; (3) Advisory Board; (4) Local Board. We consider the strengths and weaknesses of each model in relation to international strategy theory. We conclude with recommendations for the conditions under which the various models may be appropriate and practical guidelines for the utilisation of corporate governance theory to improve MNE performance.

Impact of two different body mass management strategies on repeat rowing performance

Purpose: The present study was conducted to examine the impact of acute weight loss on repeat 2000-m rowing ergometer performance during a simulated multiday regatta. and to compare two different body mass management strategies between races. Methods: Competitive rowers (N = 16) were assigned to either a control (CON), partial recovery (RECpartial), or complete recovery (RECcomplete) group. Volunteers completed four trials, each separated by 48 h. No weight restrictions were imposed for the first trial. Thereafter, athletes in RECpartial and RECcomplete were required to reduce their body mass by 4% in the 24 h before trial 2, again reaching this body mass before the final two trials. No weight restrictions were imposed on CON. Aggressive nutritional recovery strategies were used in the 2 h following weigh-in for all athletes. These strategies were maintained for the 12-16 h following racing for RECcomplete with the aim of restoring at least three quarters of the original 4% body mass loss. Postrace recovery strategies were less aggressive in RECpartial; volunteers were encouraged to restore no more than half of their initial 4% body mass loss. Results: Acute weight loss increased time to complete the first at-weight performance trial by a small margin (mean 3.0, 95% CI -0.3 to 6.3 s, P = 0.07) when compared with the CON response. This effect decreased when sustained for several day,. Aggressive postrace recovery strategies tended to eliminate the effect of acute Weight loss on subsequent performance. Conclusion: Acute weight loss resulted in a small performance compromise that was reduced or eliminated when repeated over several days. Athletes should be encouraged to maximize recovery in the 12-16 h following racing when attempting to optimize subsequent performance.