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.

Agency Conflicts and Corporate Payout Policies: A Global Study

We investigate the roles of finn and country level agency conflicts in determining corporate payout policics. Based on a large sample of 29,610 firms in 42 countries from 2001 to 2006, we show there is a form of "pecking order" in investors' ability to extract cash (whether as dividends only or share repurchases) from firms. Although investors are able to use their legal powers to extract cash from firms in high protection countries, their ability to do so can be substantially hindered when agency costs at the firm level are high. In poor protection countries, investors seem to take whatever cash they can get, even though the amount may be small, and with scant regard for investment opportunities and firm level agency conflicts. Finally, compared to repurchases, we find dividends are more likely to be the sole method of payout in high protection countries and in non insider-dominated firms.

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

Compliance with international financial reporting standards (IFRS) and the value relevance of accounting information in emerging stock markets : evidence from Kuwait

Since the 1960s, the value relevance of accounting information has been an important topic in accounting research. The value relevance research provides evidence as to whether accounting numbers relate to corporate value in a predicted manner (Beaver, 2002). Such research is not only important for investors but also provides useful insights into accounting reporting effectiveness for standard setters and other users. Both the quality of accounting standards used and the effectiveness associated with implementing these standards are fundamental prerequisites for high value relevance (Hellstrom, 2006). However, while the literature comprehensively documents the value relevance of accounting information in developed markets, little attention has been given to emerging markets where the quality of accounting standards and their enforcement are questionable. Moreover, there is currently no known research that explores the association between level of compliance with International Financial Reporting Standards (IFRS) and the value relevance of accounting information. Motivated by the lack of research on the value relevance of accounting information in emerging markets and the unique institutional setting in Kuwait, this study has three objectives. First, it investigates the extent of compliance with IFRS with respect to firms listed on the Kuwait Stock Exchange (KSE). Second, it examines the value relevance of accounting information produced by KSE-listed firms over the 1995 to 2006 period. The third objective links the first two and explores the association between the level of compliance with IFRS and the value relevance of accounting information to market participants. Since it is among the first countries to adopt IFRS, Kuwait provides an ideal setting in which to explore these objectives. In addition, the Kuwaiti accounting environment provides an interesting regulatory context in which each KSE-listed firm is required to appoint at least two external auditors from separate auditing firms. Based on the research objectives, five research questions (RQs) are addressed. RQ1 and RQ2 aim to determine the extent to which KSE-listed firms comply with IFRS and factors contributing to variations in compliance levels. These factors include firm attributes (firm age, leverage, size, profitability, liquidity), the number of brand name (Big-4) auditing firms auditing a firm’s financial statements, and industry categorization. RQ3 and RQ4 address the value relevance of IFRS-based financial statements to investors. RQ5 addresses whether the level of compliance with IFRS contributes to the value relevance of accounting information provided to investors. Based on the potential improvement in value relevance from adopting and complying with IFRS, it is predicted that the higher the level of compliance with IFRS, the greater the value relevance of book values and earnings. The research design of the study consists of two parts. First, in accordance with prior disclosure research, the level of compliance with mandatory IFRS is examined using a disclosure index. Second, the value relevance of financial statement information, specifically, earnings and book value, is examined empirically using two valuation models: price and returns models. The combined empirical evidence that results from the application of both models provides comprehensive insights into value relevance of accounting information in an emerging market setting. Consistent with expectations, the results show the average level of compliance with IFRS mandatory disclosures for all KSE-listed firms in 2006 was 72.6 percent; thus, indicating KSE-listed firms generally did not fully comply with all requirements. Significant variations in the extent of compliance are observed among firms and across accounting standards. As predicted, older, highly leveraged, larger, and profitable KSE-listed firms are more likely to comply with IFRS required disclosures. Interestingly, significant differences in the level of compliance are observed across the three possible auditor combinations of two Big-4, two non-Big 4, and mixed audit firm types. The results for the price and returns models provide evidence that earnings and book values are significant factors in the valuation of KSE-listed firms during the 1995 to 2006 period. However, the results show that the value relevance of earnings and book values decreased significantly during that period, suggesting that investors rely less on financial statements, possibly due to the increase in the available non-financial statement sources. Notwithstanding this decline, a significant association is observed between the level of compliance with IFRS and the value relevance of earnings and book value to KSE investors. The findings make several important contributions. First, they raise concerns about the effectiveness of the regulatory body that oversees compliance with IFRS in Kuwait. Second, they challenge the effectiveness of the two-auditor requirement in promoting compliance with regulations as well as the associated cost-benefit of this requirement for firms. Third, they provide the first known empirical evidence linking the level of IFRS compliance with the value relevance of financial statement information. Finally, the findings are relevant for standard setters and for their current review of KSE regulations. In particular, they highlight the importance of establishing and maintaining adequate monitoring and enforcement mechanisms to ensure compliance with accounting standards. In addition, the finding that stricter compliance with IFRS improves the value relevance of accounting information highlights the importance of full compliance with IFRS and not just mere adoption.

Music, Mime & Metamorphosis: Interdisciplinary intersections, interactions and influences between music, mime and corporate communication

This doctoral thesis comprises three distinct yet related projects which investigate interdisciplinary practice across: music collaboration; mime performance; and corporate communication. Both the processes and underpinning research of these projects explore, expose and exploit areas where disparate and apparently conflicting fields of professional practice successfully and effectively; intersect, interact, and inform each other - rather than conflict - thereby enhancing each, both individually and collectively. Informed by three decades of professional practice across: music; stage performance; television; corporate communication; design; and tertiary education, the three projects have produced innovative, creative, and commercial viable outcomes, manifest in a variety of media including: music; written text; digital, audio/visual; and internet. In exploring new practice and creating new knowledge, these project outcomes clearly demonstrate the value and effectiveness of reconciling disparate fields of practice through the application of inter-disciplinary creativity and innovation to professional practice.

Framework for measuring corporate safety culture and its impact on construction safety performance

This paper presents the results of a structural equation model (SEM) that describes and quantifies the relationships between corporate culture and safety performance. The SEM is estimated using 196 individual questionnaire responses from three companies with better than average safety records. A multiattribute analysis of corporate safety culture characteristics resulted in a hierarchical description of corporate safety culture comprised of three major categories — people, process, and value. These three major categories were decomposed into 54 measurable questions and used to develop a questionnaire to quantify corporate safety culture. The SEM identified five latent variables that describe corporate safety culture: (1) a company’s safety commitment; (2) the safety incentives that are offered to field personal for safe performance; (3) the subcontractor involvement in the company culture; (4) the field safety accountability and dedication; and (5) the disincentives for unsafe behaviors. These characteristics of company safety culture serve as indicators for a company’s safety performance. Based on the findings from this limited sample of three companies, this paper proposes a list of practices that companies may consider to improve corporate safety culture and safety performance. A more comprehensive study based on a larger sample is recommended to corroborate the findings of this study.

Integrating information security policy management with corporate risk management for strategic alignment

Information security policy defines the governance and implementation strategy for information security in alignment with the corporate risk policy objectives and strategies. Research has established that alignment between corporate concerns may be enhanced when strategies are developed concurrently using the same development process as an integrative relationship is established. Utilizing the corporate risk management framework for security policy management establishes such an integrative relationship between information security and corporate risk management objectives and strategies. There is however limitation in the current literature on presenting a definitive approach that fully integrates security policy management with the corporate risk management framework. This paper presents an approach that adopts a conventional corporate risk management framework for security policy development and management to achieve alignment with the corporate risk policy. A case example is examined to illustrate the alignment achieved in each process step with a security policy structure being consequently derived in the process. It is shown that information security policy management outcomes become both integral drivers and major elements of the corporate-level risk management considerations. Further study should involve assessing the impact of the use of the proposed framework in enhancing alignment as perceived in this paper.

Globalisation and corporate real estate strategies

Purpose: The purpose of this paper is to examine the impact of globalisation on corporate real estate strategies. Specifically, it seeks to identify corporate real estate capabilities that are important in a hypercompetitive business climate. ---------- Design/methodology/approach: This paper utilises a qualitative approach to analyse secondary data in order to identify the corporate real estate capabilities for a hypercompetitive business environment. ---------- Findings: Globalisation today is an undeniable phenomenon that is fundamentally changing the way business is conducted. In the light of global hypercompetition, corporate real estate needs to develop new capabilities to support global business strategies. These include flexibility, network organization and managerial learning capabilities. ---------- Research limitations/implications: This is a conceptual paper and future empirical research needs to be conducted to verify the propositions made in this paper. ---------- Practical implications: Given the new level of uncertainty in the business climate, that is, hypercompetition, businesses need to develop dynamic capabilities that are harder for competitors to imitate in order to maintain what is considered a “momentary” competitive advantage. The findings of this paper are useful to guide corporate real estate managers in this regard. ---------- Originality/value:– This paper is original in two ways. First, it applies the strategic management concept of capabilities to corporate real estate. Second, it links the key challenge that businesses face today, i.e. globalisation, to the concept of capabilities as a means to maintain competitive advantage.

The dynamic processes of visual, corporate, and organisational identity : an exploratory study

The purpose of this study is to contribute to the cross-disciplinary body of literature of identity and organisational culture. This study empirically investigated the Hatch and Schultz (2002) Organisational Identity Dynamics (OID) model to look at linkages between identity, image, and organisational culture. This study used processes defined in the OID model as a theoretical frame by which to understand the relationships between actual and espoused identity manifestations across visual identity, corporate identity, and organisational identity. The linking processes of impressing, mirroring, reflecting, and expressing were discussed at three unique levels in the organisation. The overarching research question of How does the organisational identity dynamics process manifest itself in practice at different levels within an organisation? was used as a means of providing empirical understanding to the previously theoretical OID model. Case study analysis was utilised to provide exploratory data across the organisational groups of: Level A - Senior Marketing and Corporate Communications Management, Level B - Marketing and Corporate Communications Staff, and Level C - Non-Marketing Managers and Employees. Data was collected via 15 in-depth interviews with documentary analysis used as a supporting mechanism to provide triangulation in analysis. Data was analysed against the impressing, mirroring, reflecting, and expressing constructs with specific criteria developed from literature to provide a detailed analysis of each process. Conclusions revealed marked differences in the ways in which OID processes occurred across different levels with implications for the ways in which VI, CI, and OI interact to develop holistic identity across organisational levels. Implications for theory detail the need to understand and utilise cultural understanding in identity programs as well as the value in developing identity communications which represent an actual rather than an espoused position.