Removal of directors of public companies takes centre stage in Australia : an exploration of the corporate law and governance issues

Increasing attention is being given to the legal and governance issues relating to the removal of directors in Australian public companies. This has been due mainly to the difficulties experienced by the board of National Australia Bank in attempting to remove one of its fellow directors, and the subsequent development of public companies entering into so-called 'prenuptial agreements' with new directors, requiring that the director 'resign' if the board pass a vote of no-confidence in the director. In this article, the author revisits the area of director removal in Australian public companies for two reasons. The first reason, which covers the majority of the article, is to engage in a detailed analysis of whether the pre-nuptial agreements which some public companies have indicated that they support using to remove directors, are in fact enforceable under Australia's Corporations Act The second reason is to outline a law reform proposal to enable public companies to remove directors without requiring the vote of shareholders at a general meeting. The proposal involves providing Australia' corporate  regulator, the Australian Securities and Investments Commission (ASIC) with the power to grant relief from the statutory removal provisions to public companies, but in a way which balances the competing objectives of commercial efficiency and shareholder participation and, very importantly, encourages good corporate governance practices by companies in relation to the performance assessment  of directors.

It is in the interests of both shareholders and directors to agree on a set of ground rules for the effective supervision of companies that reconciles the rights of the owners to overall control with the much tougher demands on modern directors

On the governance of public education

Private schools in Australia receive significant public funding, but their determination to concentrate social and cultural capital and consolidate positional advantage ‘denies the possibility of their serving the public interest’. A 1998 study of Victorian private schools has confirmed that they produce above-average academic results and are also concentrated in high socioeconomic geographic areas. The few private schools outside this pattern serve mainly provincial areas or ethnic minority groups. High academic credentials depend at least in part on their scarcity, and ‘the selective function of schools, directed towards establishing a hierarchy of performance, overwhelms the pedagogical function of universal learning and social justice,’ especially at transition points in the education system. The governance procedures of schools typically encourage high academic standards ‘through mechanisms of exclusion’. Private schools in particular, at the secondary level, tend to ‘export failure’ through ‘predatory recruitment and selective dumping practices’, and by arrangements with universities for early placement of high performers into preferred tertiary courses. The broader education system reinforces the competitive processes within schools though competitive examinations. A range of steps can address these equity problems. Curriculum should be made more sensitive to disadvantaged social groups. Secondary schools should be aligned more closely to the social, cultural and economic development of their communities through mechanisms such as VET in schools, linkages with TAFE colleges, and a broadened curriculum that addresses community problems.

Governance and goodness in the public arena

We discuss the association of governance with notions of goodness and virtue in the public arena. In line with moves away from universal notions of best practice and toward recognition of local initiatives, we suggest that public management research give more explicit attention to the ethical frameworks that underlie and complicate definitional and values-based debates. We suggest that greater consideration of the ethics of public management may assist researchers to move beyond definitional dilemmas and will inform analysis of hybrid or 'reformed' bureaucracies where competing logics may be in play.

Law, governance and risk: deconstructing the public-private divide in climate change adaptation

The article focuses on the public–private divide in law and which organizes principles for and governance. It analyzes the governance model of public–private divide regarding for climate change adaptation in context to a case study of water governance and flood risk. It compares the relationship between state and individual laws which helps in policy setting.

The prospects of deliberative global governance in the G20: legitimacy, accountability, and public contestation

This article contends that the ‘G’ system struggles to play a legitimate and effective role in global governance and argues that the G20 could play a important role if the forum was more publically accountable. This article argues that because of increasing forms of public contestation, the broadening agenda of the G8 and G20 and the uncertain status of global cooperation, that the legitimacy of the ‘G’ system is being questioned. As such, it is appropriate to consider deliberative avenues whereby public views could be considered by the G20 in a systematic way to foster forms of accountability. This consideration is animated by deliberative democracy theory and republican theory which advance a normative agenda which seeks to transform governance structures by enhancing the role of deliberation and public reasoning in political life. The article outlines the development of the ‘G’ system's legitimacy, considers possible modes of accountability and public involvement with respect to the G20 and examines the implications of more formalised public deliberation with respect to the G20.

International medicines governance 1940s to 1970s : lessons for public health

Public health advocates aim to maximise affordable access to good quality essential medicines. This goal often conflicts with the profit-seeking ambitions of the pharmaceutical industry. Since the World Trade Organisation’s Trade-Related Aspects of Intellectual Property Rights agreement, the extension and enforcement of intellectual property (IP) rights has become the dominant discourse in global medicines governance. Public health advocates operating within this framework face significant obstacles and challenges. This paper presents an historical perspective to the contemporary debate over medicines and patents by examining the evolution of international medicines governance between the 1940s and 1970s. This research indicates that debates around IP and medicines were more advanced in terms of equity and access in the 1960s and 1970s than they are today. While acknowledging the existence of obstacles and challenges for advocates, the paper argues that alternative frameworks can and should be reasserted in global debates about medicines governance.

Liberty beyond neo-liberalism: a republican critique of liberal governance in a globalising age

Steven Slaughter examines whether liberals can govern in a way that promotes liberty and moderates the significant social dislocation associated with neo-liberalism and economic globalisation. This book critically evaluates the potential of various liberal arguments to adequately address the harmful social aspects of economic globalisation in three distinct stages. First, it examines the configuration of contemporary economic globalisation and the consequences of this process for liberal thought and governance. Second, it examines contemporary liberal approaches by critically examining a series of liberal texts that provide practical alternative schemes of governance. Third, in finding these contemporary liberal arguments insufficient to the task of a socially responsible regulation of economic globalisation, the book concludes with an innovative scheme that stems from neo-Roman republican political theory.
This alternate approach is termed global civic republicanism and seeks to retrieve the public and civic character of the state in order to provide its citizens protection from economic vulnerability and thereby constitute a resilient form of individual liberty. As such, the philosophical and practical resources that support the idea of republican states are outlined and contrasted with cosmopolitan modes of thought. The legacy of republican ideas in respect to political economy, world politics and global governance are also examined.

Management attitudes to corporate governance issues : evidence from Sri Lanka

This study investigates the attitudes of senior managers in Sri Lankan firms to governance issues using a countrywide cross-sectional survey. Respondents from 64 public firms provide information on manager's attitudes to internal control procedures: (1) producing misleading financial reports, (2) providing faulty investment advice, (3) permitting insider-trading, and (4) providing inaccurate advertising. We establish if these attitudes vary with 5 firm-specific factors: industry group, international exposure of firms, size, whether the firm was listed or not, and whether the firm had a written code of ethics. Employing ordinal logistic regression techniques, the results demonstrate significant variation by respondents within different types of firms. Specifically there was little variation to these issues when respondents were classified by industry, with most variation when classified by international involvement. Respondents from firms with significant international exposures were strongly opposed to most practices, while respondents from firms with written codes of ethics were strongly opposed to the production of misleading reports and insider-trading. Interestingly respondents from listed firms were most opposed to insider-trading, while smaller firms were more opposed to misleading advertising than respondents from larger firms. The results have important implications for the implementation of corporate governance practice.

Outsourcing and benchmarking in a rural public hospital : does economic theory provide the complete answer?

INTRODUCTION: The ideology and pronouncements of the Australian Government in introducing 'competitive neutrality' to the public sector has improved efficiency and resource usage. In the health sector, the Human Services Department directed that non-clinical and clinical areas be market tested through benchmarking services against the private sector, with the possibility of outsourcing. These services included car parking, computing, laundry, engineering, cleaning, catering, medical imaging (radiology), pathology, pharmacy, allied health and general practice. Managers, when they choose between outsourcing, and internal servicing and production, would thus ideally base their decision on economic principles. Williamson's transaction cost theory studies the governance mechanisms that can be used to achieve economic efficiency and proposes that the optimal organisation structure is that which minimises transaction costs or the costs of exchange. Williamson proposes that four variables will affect such costs, namely: (i) frequency of exchange; (ii) asset specificity; (iii) environmental uncertainty; and (iv) threat of opportunism. This paper provides evidence from a rural public hospital and examines whether Williamson's transaction cost theory is applicable. d into an analysis that relies solely on transaction

Reflections on some recent corporate governance reforms in Germany. A transformation of the German aktienrecht?

Focuses on the German law reform relating to public corporations. Flaws to the German system of corporate governance; Advantages of comparative corporate governance research; Features of the German Corporate Governance Code.

The importance of audit committees in initial public offerings

This paper follows Balvers, McDonald and Miller (1988), and Beatty (1989), who find lower underpricing in Initial Public Offerings (IPOs) when prestigious auditors are used to attest to the IPO's financial statements. Australian IPOs are not obliged to nominate audit firms in the prospectus, but often identify that they will have audit committees so as to assist in more appropriate corporate governance. This paper analyzes if IPOs identifying the existence of audit committees in the prospectus have a lower underpricing return. While our findings are consistent with previous studies concluding that both the size of the new issue and the use of an underwriter are important ingredients in the level of underpricing return, the inclusion of an audit committee in the prospectuses has actually increased underpricing returns. The capital market may view the audit committee identification with some skepticism.

The German two-tier board and the German corporate governance code

This paper deals with some interesting recent corporate governance developments in Germany. The focus is in particular on the German Corporate Governance Code, its parts, layout and how it deals with the various organs of German public corporations. The German Code is quite unique since it applies a Code of Good Practice to a two-tier board system, thus making it necessary to deal with the role and functions and the relationship between the management and the supervisory board. This paper concludes that several changes to the German law relating to public corporations since the middle of the 1990s and the introduction of the German Code will ensure that the two-tier board system will remain the favoured board structure for public corporations in Germany. It is, however, submitted that employee participation at supervisory board level will provide particular political challenges for Germany in the near future.

Towards real shareholder participation in contemporary corporate governance

Enhanced shareholder participation in large public companies in Australia has not gone far enough.  Shareholders need to be given the opportunity to contribute to the forming of company decisions and strategies.  One proposal is to require that directors themselves be shareholders. A second proposal mandates shareholder committees in public companies.