Corporate governance convergence and moral relativism

Research question / issue This paper frames the debate on corporate governance convergence in terms of the morality underlying corporate governance models. The claims and arguments of moral relativism are presented to provide theoretical structure to the moral aspects of corporate governance convergence, and ultimately the normative question of whether convergence should occur. Research findings / insights: The morality underlying different models of corporate governance has largely been ignored in the corporate governance convergence literature. A range of moral philosophies and principles that underlie the dominant corporate governance models are identified. This leads to a consideration of the claims and arguments of moral relativism relating to corporate governance. A research agenda around the claims of Descriptive and Metaethical moral relativism, and which ultimately informs the associated normative argument, is then suggested. Theoretical / Academic implications The application of moral relativism to the debate on corporate governance convergence presents a theoretical structure to the analysis and consideration of its moral aspects. This structure lends itself to further research, both empirical and conceptual. Practitioner / Policy implications The claims and arguments of moral relativism provide a means of analysing calls that are made for a culturally or nationally ‘appropriate’ model of corporate governance. This can assist in providing direction for corporate governance reforms and is of particular relevance for developing countries which have inherited Western corporate governance models through colonialism.

The ethics of corporate governance: A (South)African perspective

Purpose – The purpose of this paper is to review the developments in South African corporate governance since the end of apartheid, with a view to identifying themes and points of convergence and/or divergence with other models. Design/methodology/approach – The paper presents a critical review of South African corporate governance in the context of political and economic developments. Where relevant, aspects of corporate governance theory (in particular the stakeholder and shareholder debate) are considered in the South African context. Findings – South African corporate governance can be seen to broadly follow Anglo‐American examples with the notable exception of the stakeholder approach of the two King reports. This approach emphasises the responsibilities of companies to various stakeholders and encourages stakeholder engagement as an integral element of company strategy. There has not, however, been any substantial incorporation of stakeholder interests into formal corporate governance structures such as board structure and financial reporting. Practical implications – The ongoing consideration of corporate governance developments in South Africa is important for its continued development in the country and the region. Originality/value – A review of South African corporate governance is timely given the probable release of the third King report in 2009, together with new company legislation.

Theorising South Africa's corporate governance

South Africa’s principal corporate governance report aspires to an ‘inclusive’ approach to corporate governance, in which companies are clearly advised to consider the interests of a variety of stakeholders. Yet, in common with many other countries, there is little discussion of the theoretical foundations and assumptions implicit in the recommended approach to corporate governance. The purpose of this article is to provide an analysis of corporate governance and the corporate environment in South Africa in terms of existing theory and models of corporate governance, and to provide a critique based on a consideration of traditional African values and the socio-economic necessities of post-apartheid South Africa. The result is the identification of an incompatibility between the current corporate environment in South Africa and the given exposition of African values. Some prospects for change are then identified.

Stand-out progress from our corporate first-movers

In May, the National Business Leaders Forum on Sustainable Development meets for the 10th time. More than ever business leadership is needed to help us all address the challenges around climate change, water availability and species loss. Here’s a quick look at some committed corporate stars...

Smoke and mirrors in trade disputes will harm public health

The 2014 World Cancer Report, issued by the World Health Organisation (WHO), indicates that the number of new cancer cases has reached an all-time high. On the 19 May 2014, Dr Margaret Chan, the Director-General of the WHO, gave a stirring speech to the 67th Health Assembly on the heavy health burden associated with cancer. Chan was particularly interested in public health measures designed to combat the global tobacco epidemic...

A social licence to operate: Corporate social responsibility, local communities and the constitution of global production networks

This article contributes to the theorization of the role of informal regulation (undertaken by leading firms) in the ongoing organization of global production networks. It does so through a qualitative case study of BHP Billiton's Ravensthorpe Nickel Operation (RNO) in the rural Shire of Ravensthorpe in Western Australia. This less tangible, and to date under-researched, dimension of global production networks is foregrounded through a focus on the corporate social responsibility strategy implemented by RNO in the service of achieving and/or demonstrating a broader ‘social licence to operate’. This ‘licence’ functions – beyond the corporation – as a legitimated and legitimating multi-scalar mechanism through which to gain and maintain access to mineral resources and thus to establish viable and ongoing global production networks. Further, this informal regulation is shown to shape social relations and qualities of place conducive to competitive global mineral extraction and to facilitate the positioning of local communities and places in mineral global production networks.

Corporate Governance in the 21st Century: Japan's Gradual Transformation

The 'lost' decade of economic stagnation in Japan during the 1990s has become a 'found decade' for regulatory and institutional reform. With nearly all areas of the 'law in the books' reviewed, revised and rewritten, the Japanese legal system is no longer the system that foreign commentators felt they were finally starting to understand by the 1980s. Nowhere is this more evident than in corporate governance. Corporate and securities legislation has been comprehensively revamped over 1993-2007, creating a more flexible and transparent regime for shareholders and managers. Financial markets law and regulatory institutions have changed, too, creating a new context for Japan's 'main banks' as alternative or additional outside monitors of managerial performance in borrowing firms. Even the legislation surrounding labour regulations has been amended, reinforcing the lifelong security privileges for elite employee-stakeholders, yet also hastening the growth of other atypical employment relationships. But how do such legislative reforms affecting key players in Japanese firms, covering areas central to the design of Japanese capitlaism, play out in the 'law in action'? Overall, this book argues that a significant gradual transformation has occurred. Although this is evident also in other advanced industrialised democracies, such as Germany, Japan reveals especially complex interactions in the various fields that sometimes emphasise different ways of achieving such transformation.

From mountaintop to corporate ladder: What new professionals really really want in a capstone experience!

Capstone subjects are increasingly used in Universities worldwide to complete the undergraduate program experience and to transition graduates into the workplace. As such, capstones fulfil a large role consolidating one experience and traversing the gap to another. Yet, little is known or understood about their design, their implementation or evaluation. In this study we investigate the final-year experience from the student's perspective. We surveyed graduates from five Business Schools in Australia to identify perceptions of their final-year experience. Findings indicate that the transition experience of the student to professional is unique. In their liminal or intermediate state between student and professional they recognise the value of process skills, in particular the development of generic business skills related to application and the importance of opportunities for experiencing the application of theory in practice. The findings add a new understanding to the current literature which has not previously acknowledged the insight of the transitioning professional.

Corporate Social Responsibility Assurance: Theory, Regulations and Practice in China

This chapter aims to provide a comprehensive understanding of the theory, regulations and practice of corporate social responsibility (CSR) assurance in China. Built on stakeholder and related theories, it employs a demand-and-supply analytical framework to illustrate the development and current status of China’s CSR assurance market. It finds that government agencies, stock exchanges, accounting standard setters and industrial associations have collectively shaped the current regulatory framework on CSR reporting and assurance in China. Regarding demand, differences in the social and legal environments across such a large country influence the regional development of CSR assurance. Industries under intensive CSR regulations and/or social reporting pressure—for example, the finance, aviation and mining industries—more actively achieve CSR report assurance. Regarding supply, the CSR assurance market in China is shared by accounting firms and professional certification bodies. Different assurance standards adopted by the two streams of assurance providers have different foci, potentially leading to different assurance coverage and emphases.

Saviour Siblings and the Regulation of Assisted Reproductive Technology: Harm, Ethics and Law

Advances in the field of Assisted Reproductive Technology (ART) have been revolutionary. This book focuses on the use of ARTs in the context of families who seek to conceive a matching sibling donor as a source of tissue to treat an existing sick child. Such children have been referred to as ‘saviour siblings’. Considering the legal and regulatory frameworks that impact on the accessibility of this technology in Australia and the UK, the work analyses the ethical and moral issues that arise from the use of the technology for this specific purpose. The author claims the only justification for limiting a family’s reproductive liberty in this context is where the exercise of reproductive decision-making results in harm to others. It is argued that the harm principle is the underlying feature of legislative action in Western democratic society, and as such, this principle provides the grounds upon which a strong and persuasive argument is made for a less-restrictive regulatory approach in the context of ‘saviour siblings’.

Regulating against corporate phoenix activity

This paper considers the adequacy and efficiency of existing legal and regulatory frameworks to deal with corporate phoenix activity. Phoenix activity, which is often triggered by a solvency crisis, is estimated to cost the Australian economy up to $3 billion each year. Despite the raft of piecemeal Australian legislation directed at this activity, phoenix activity does not appear to be abating. This paper considers regulatory approaches to detection and enforcement of the underlying law. This study reveals and explores a perception that the law is deficient, and the tension that exists between the adequacy of the law and the regulatory approach.

Introduction: Japan’s gradual transformation in corporate governance

Japan has recovered from a ‘lost decade’ of economic stagnation over the 1990s. Anyway, it has been a ‘found decade’ for civil and criminal justice law reform, especially in corporate and securities law. Yet, have liberalisation and globalisation in those fields led to major changes in the ‘law in action’? Does this represent ‘Americanisation’ of Japan’s corporate governance system, focusing on shareholders rather than other key stakeholders such as ‘main banks’, core employees, and partners within diffuse corporate groups (keiretsu)? This version of our introductory chapter explains how our forthcoming book argues for a more complex ‘gradual transformation’. Such shifts are also found in many other post-industrial economies, but Japan appears to give greater emphasis given to certain modes of achieving change. The book brings together contributions from academics and practitioners from Japan, Australia, New Zealand, Canada and the United States. An early chapter introduces methodology for effective cross-country comparisons and for evaluating the burgeoning but divergent literature on Japanese corporate governance. The concluding chapter compares continuities and changes in Japan’s largest companies now and two decades ago. Other chapters cover ‘lifelong employment’, main banks, the untold story of closely-held companies, the limited uptake of the Committee-based governance form, and the procedural, substantive and FDI policy dimensions of takeovers law and practice.

The corporate regulation of sexual harassment in Japan

Book Title in Japanese: 雇用・社会保障とジェンダー Chapter Title in Japanese: セクシャル・ハラスメント規制の企業化と男女平等政策への示唆

Corporate governance and law reform in Japan: From the lost decade to the end of history?

Japan is in the midst of massive law reform. Mired in ongoing recession since the early 1990s, Japan has been implementing a new regulatory blueprint to kickstart a sluggish economy through structural change. A key element to this reform process is a rethink of corporate governance and its stakeholder relations. With a patchwork of legislative initiatives in areas as diverse as corporate law, finance, labour relations, consumer protection, public administration and civil justice, this new model is beginning to take shape. But to what extent does this model represent a break from the past? Some commentators are breathlessly predicting the "Americanisation" of Japanese law. They see the triumph of Western-style capitalism - the "End of History", to borrow the words of Francis Fukuyama - with its emphasis on market-based, arms-length transactions. Others are more cautious, advancing the view that there new reforms are merely "creative twists" on what is a uniquely (although slowly evolving) strand of Japanese capitalism. This paper takes issue with both interpretations. It argues that the new reforms merely follow Japan's long tradition of 'adopting and adapting' foreign models to suit domestic purposes. They are neither the wholesale importation of "Anglo-Saxon" regulatory principles nor a thin veneer over a 'uniquely unique' form of Confucian cultural capitalism. Rather, they represent a specific and largely political solution (conservative reformism) to a current economic problem (recession). The larger themes of this paper are 'change' and 'continuity'. 'Change' suggests evolution to something identifiable; 'continuity' suggests adhering to an existing state of affairs. Although notionally opposites, 'change' and 'continuity' have something in common - they both suggest some form of predictability and coherence in regulatory reform. Our paper, by contrast, submits that Japanese corporate governance reform or, indeed, law reform more generally in Japan, is context-specific, multi-layered (with different dimensions not necessarily pulling all in the same direction for example, in relations with key outside suppliers), and therefore more random or 'chaotic'.