Derivative actions as a mechanism for the protection of minority shareholders in China: a result of convergence or divergence

The protection of minority shareholders has become one of the key features of company law reform in many countries in recent years. Various mechanisms have been created to achieve this objective. Australia has introduced the statutory derivative action procedure mainly based on models drawn from Canada and New Zealand; this provision was inserted into the Corporations Act in March 2000. China has also adopted a similar mechanism – known as the shareholder representative action; this scheme was based upon China’s understanding of statutory derivative actions in Western countries. China’s derivative action mechanism is reflected in amendments to the 2005 PRC Company Law and 2005 Securities Law that both were passed on 27 October 2005 and came into effective on 1 January 2006. The development of statutory derivative actions in different countries demonstrates the interaction between forces of convergence and divergence in company law reforms. This article reviews different mechanisms adopted in the Chinese law for the protection of minority shareholders. It especially focuses on an analysis of the nature of the shareholder representative action and the procedures for its utilisation in China – the equivalent to Western countries’ derivative actions. In comparison with statutory derivative actions in Australia, this article argues that the concept of the shareholder representative action in China rests upon a misunderstanding of Western derivative actions; this has involved a compromise between the dire need to protect shareholders and the ambiguities of a weak court system. As a consequence, China’s reforms in this area are largely a tentative gesture and are therefore unlikely to be very effective.

The role of brand orientation in explaining retail offer advantage

We provide a conceptualisation and operationalisation of brand orientation within the context of retailing. We then empirically test this operationalisation in terms of a retail offer advantage across the dimensions of merchandise, trading format, customer service and customer communication. Our results suggest that the degree to which a retailer values brands and its practices are oriented towards building brand capabilities provides a valuable theoretical framework to explain variations in retailers' advantage over their competitors.

Regulatory change, structural breaks, and transmission effects in HSIF and HSI volatility

A systematic BEKK-GARCH model with multiple switch points in the variance equations captures the structural changes that have taken place in the Hong Kong markets. Abolishment of the uptick rule in the Hong Kong stock market, increase of initial margins, and electronic trading of Hang Seng Index Futures are found to have significant impacts. These changes affect the volatility structure of the HSI and HSIF and hence their lead-lag relationship. The multivariate GARCH model with three specific switching points is found to be superior to any other combination of up to six separate switch points.

Legal regulation and corporate governance in China`s top 100 listed companies

This article reports findings from an empirical study of corporate governance in China's top 100 listed companies. It examines the effectiveness of legal regulation, enforcement and remedies, finding that China's company and securities laws have not provided as string a legal framework for the protection of stakeholders im China's stock exchange listed companies as might be expected by investors.

Probabilistic reasoning of inconsistent belief in protocol analysis

Security protocols have been recently found with subtle flaws due to incomplete or ambiguous specification. Although formal methods have remarkably assisted in protocol analysis, they ignores the effect of hostile/uncertain environment, which might lead to inconsistent belief that can be held by principals in delivered messages. This discrepant belief may prevent us from representing the insecurity and uncertainty in a real trading situation. Unfortunately, the current approaches lack the ability to handle the inconsistent belief. This article presents a probabilistic method, which intuitively measures the belief from different principals that can be put on the goal of the protocol. The experiments demonstrate our method is useful to enhance the protocol analysis.

Electronic negotiation and security of information exchanged in e-commerce

In settings such as electronic markets where trading partners have conflicting interests and a desire to cooperate, mobile agent mediated negotiation have become very popular. However, agent-based negotiation in electronic commerce involves the exchange of critical and sensitive data that must be highly safeguarded. Therefore, in order to give benefits of quick and safe trading to the trading partners, an approach that secures the information exchanged between the mobile agents during e-Commerce negotiations is needed. To this end, we discuss an approach that we refer to as Multi-Agent Security NEgotiation Protocol (MASNEP). To show that MASNEP protocol is free of attacks and thus the information exchanged throughout electronic negotiation is truly secured, we provide a formal proof on the correctness of the MASNEP.

Secure mobile agent-based e-negotiation for on-line trading

Electronic negotiation (e-negotiation) is a major activity in e-Commerce applications. Agent-based e-negotiation has recently received increasing attention. However, agent-based electronic negotiation suffers from a number of security attacks. In this paper, we present a mobile agent-based e-commerce framework. We also propose a security protocol that protects the information exchanged between the mobile agents during e- negotiations. We reason the correctness of the proposed security protocol in the presence of various security threats. The reasoning shows that the protocol maintains privacy, non- repudiation, authenticity, anonymity, and strong integrity of exchanged information.

Ecotourism in Costa Rica: an economic framework of analysis

Costa Rica is a small Central American nation that has gained an international reputation as a leader in environmental conservation. This has formed the base for its highly successful and lucrative small-scale ecotourism industry. However, there are threats from high rates of deforestation and expanding large scale tourism that is trading on strong environmental credentials. This paper sets out an ecologically sustainable economic framework to firstly examine the Costa Rican experience, and then analyse lessons for general policy development of any ecotourism industry. The analysis is conducted from a political economy perspective on the trade-offs between small-scale and large-scale tourism.

Talent identification and risk management at AFL clubs : 'We'll only recruit public school boys in the future'

This paper will report on a research project funded by the Australian Football League (AFL).The research mobilises Foucault's later work on the care of the Self to focus on the ways in which player identities are regulated; and the manner in which players conduct themselves in ways that can be characterised as professional - or not.

The paper explores the forms of risk management that Clubs use in the processes of talent identification that they engage in as a consequence of AFL rules. The paper discusses how psychological profiling is used to identify character traits prior to initial recruitment in the draft or trading processes - and reports on suggestions that risk management in this increasingly commerciaIised context may lead to recruitment practices that exclude certain types of persons. from
certain types of backgrounds.

Australian conditions imposed in stay of foreign arbitration matter

In Walter Rau Neusser Oel Und Fett AG v Cross Pacific Trading Ltd, the construction of arbitration clauses and the operation of s.7 of the International Arbitration Act 1974 (Cth) were considered - scope of the arbitration issue, mandatory stay issue and discretionary stay issue were examined.

Information leakage and informed trading around unscheduled earnings announcements

While there has been much judicial discussion regarding the competency of Australia's continuous disclosure regime with reference to contemporaneous international standards, there has to date been limited empirical analysis of the Australian system's effectiveness in preventing selective disclosure and information leakage. This paper presents an empirical study of information content and trading behaviour around unscheduled earnings announcements - comprising of profit upgrades, profit warnings and neutral trading statements - made by ASX-listed companies during 2004. The contention is that informed trading impacts on the stock returns and trading volumes of listed entities, and hence abnormal returns or trading volumes observed prior to an announcement provide evidence of information leakage. The paper models a range of factors that potentially influence firm disclosure practices and contribute to the level information asymmetry in the market during the pre- announcement period. Previous research has investigated the influence of firm size and information content in contributing to information leakage. This study further considers the variables of firm growth, capital structure and industry group.

A cross country analysis of dynamics in comparative advantage and trade patterns in textiles and clothing

This paper examines pattern of comparative advantage in textiles and clothing trade as revealed by export shares of selected developed and developing economies. The estimated revealed comparative advantage (RCA) indices provided strong evidence of comparative advantage enjoyed by the developing economies. However, a few developed high income economies have enjoyed sustainable comparative advantage, especially in textiles trade. Significant negative correlations are observed between country specific income levels and the estimated absolute and relative RCA indices. While most of the developing economies achieved significant improvement of comparative advantage over time in clothing trade, the evidence is mixed for textiles. Additional evidence from Grubel-Lloyd (G-L) index of intra industry trade (IIT) suggest that global textiles trade could be mainly explained on the basis of product differentiation and economies of scale while clothing trade is more based on comparative advantage. Results of the study also suggest that the trading nations should engage in exploitation of forms of competition such as product differentiation in textiles trade, whereas for clothing, cost minimising remains a valid strategy.

Compositional connections : temple form in early Southeast Asia

The temples of Southeast Asia are remarkable and intriguing in their architecture, in that they are obviously derivative from Indic canon and yet
profoundly original and different from the corpus of the subcontinent. Further, the regional nuances of these temples, whether in Java, Cambodia or Champa, defy obvious and linear connections within these traditions and with the pan-Indic corpus. While epigraphists, Sanskritists and historians have made significant connections between these temple building traditions, much work remains to be done on the compositional and architectural linkages along the trading routes of South and Southeast Asia. This paper is an early attempt at understanding the compositional connections, as evident in the temple forms of early southeast Asia. To elucidate the complex material, the authors deploy a comparative method on two levels. Between ideal notions of the Hindu temple and shared cosmogony on one hand and individual temples as a realization of the ideal on the other. The consideration of the compositional material yields some surprisingly rich and varied connections. For example, the affinities between 7th century cellas in Cambodia and early Gupta models from central India are difficult to ignore. Further, the linkages between these cellas and the early Deccan experiments in structural stone raise questions about both idioms. The range of experimentation in Cambodia
(in plan forms, superstructure and construction methods are discussed with reference to their Indic antecedents. The findings of the paper raise questions about the relation between temple and treatise; between theory and practice and between the individual temple and its collective corpus.

Jump over the gorge : overcoming cultural gap in doing business with China

China has become a synonym for future business growth. It is the business nirvana of the 21st century (Chung 2004). As a major emerging market, China offers many companies great potential in their future growth. China's economic growth has been consistently double digits for the past two decades. China has become an economic power in the world. To Australia, China became its largest trading partner since 2007. While other parts of the world are experiencing economic down tum, e.g. the US and UK, Australia still enjoys its longest lasting economic growth. Much of the growth is largely built on this Chinese demand of minerals (Kirk 2004). Therefore research of Australian companies' internationalisation into China is timely and in high demand. 40 Australian companies' were investigated in a recent research conducted in July - December 2007. Among many findings through the research, one of the major issues was the impact of cultural differences on companies in their operations. The research discovered the gap of cultural differences between Australia and China is large which has caught many companies by surprise. Further the inability to deal with this large cultural gap as well as being properly prepared for the cultural issue they are about to encounter prior to entering into the Chinese market may cause serious issues on performance. It is through this research an important finding is presented that engaging culturally skilled consultants when dealing with Chinese market is an effective and cost efficient way of conducting businesses in China.

Good governance - not just for the big boys governance in organizations in New Zealand

Good governance is recognized as a fundamental indicator of the success of a company. For a small- midsized company, this is particularly so, as such companies must be able to competitively demonstrate their flexibility in the face of market forces. This flexibility is the primary advantage they hold over larger firms (Dalton, Daily, Ellstrand and Johnson, 1998). Such companies, however, can find it difficult to attract good directors (Daum and Neff, 2003) and this makes developing improved strategies of governance a challenge. Taylor, Chait and Holland suggest top directors are not attracted to small/ medium companies because “the stakes remain low, the meetings process-driven, the outcomes ambiguous, and the deliberations insular” (Taylor, Chait and Holland, 2001). We suggest that the attraction of quality directors is a uniquely impacting situation for small and mid-size firms, as it is there where additional management resources should be needed most urgently. Directors on the boards of small-medium sized businesses are often lagging behind directors of large companies in that they are less likely to be independent external directors and are less likely to represent a diversity of attributes (Dalton, Daily, Ellstrand and Johnson, 1998). Arthur Levitt, former United States Securities and Exchange Commission Chair, describes the culture of medium sized business directorships as a “kind of a fraternity of CEOs who serve on one another's boards” (Stainburn, 2005). In addition, evidence suggests directors of small- medium businesses are often insufficiently trained for the role. Uncertain directors may, for example, be unwilling to ask crucial questions of managers before making major decisions. “Board members sometimes are made to feel that asking a thorny question or advancing an alternative opinion is disloyal to the administration” (Taylor, Chait and Holland, 2001). Small and medium businesses, however, are a growing contributor to the national economies of countries internationally. In New Zealand, small and medium-size firms recording large GDP values, ahead of many large businesses, which makes our investigation into good governance practices of SMEs relevant to suggest areas in which these firms can improve their governance policies and practices. We have reviewed more than 2,000 directors, executives and investors in New Zealand, making this one of the largest non-government surveys in governance. Supported by 16 large corporate organizations, such as KPMG, Business New Zealand, Simpson Grierson, Brook Asset Management, Porter Novelli, Sheffield and ‘Management’ Magazine, this work suggests that the current processes through which directors are selected and trained to serve on Boards of small and medium businesses needs to be altered. We are also concerned over the lack of director education and the close involvement of the Chief Executives as members of the Boards. There is a general concern over the lack of director independence and whether directors are effective in their roles. We are recommending an alternative process for SMEs to select directors, which will hopefully expand the available pool of directors in quantity and quality.