Defining Europe's Capital Markets Union. Bruegel Policy Contribution Issue 2014/12, 13 November 2014

The new European Commission has signalled that it will work to create a ‘capital markets union’. This is understood as an agenda to expand the non-bank part of Europe’s financial system, which is currently underdeveloped. The aim in the short term is to unlock credit provision as banks are deleveraging, and in the longer term, to favour a more diverse, competitive and resilient financial system. Direct regulation of individual non-bank market segments (such as securitisation, private placements or private equity) might be useful at the margin, but will not per se lead to significant capital markets development or the rebalancing of Europe’s financial system away from the current dominance by banks. To reach these goals, the capital markets union agenda must be broadened to address the framework conditions for the development of individual market segments. Six possible areas for policy initiative are, in increasing order of potential impact and political difficulty: regulation of securities and specific forms of intermediation; prudential regulation, especially of insurance companies and pension funds; regulation of accounting, auditing and financial transparency requirements that apply to companies that seek external finance; a supervisory framework for financial infrastructure firms, such as central counterparties, that supports market integration; partial harmonisation and improvement of insolvency and corporate restructuring frameworks;and partial harmonisation or convergence of tax policies that specifically affect financial investment.

Les stratégies syndicales face aux restructurations d’entreprises : une étude comparative des contre-pouvoirs syndicaux dans le secteur des équipementiers automobiles en France et au Canada

Cette thèse tente de comprendre l’impact des restructurations des entreprises multinationales sur les stratégies syndicales. Les acteurs syndicaux locaux sont-ils déterminés par l’appartenance à des régimes nationaux et à des contingences organisationnelles ou peuvent-ils influencer des décisions objectives comme les restructurations ? Cette recherche s’insère dans une problématique large qui fait la jonction entre la mondialisation économique sur une base continentale, la réorganisation productive des entreprises multinationales et l’action syndicale. Au plan théorique, nous confrontons trois grandes approches analytiques, à savoir : le néo-institutionnalisme et les structures d’opportunités ; l’économie politique critique et la question du pouvoir syndical ; la géographie économique critique mettant de l’avant les contingences, l’encastrement et l’espace concurrentiel. Sur la base de ces trois familles, nous présentons un modèle d’analyse multidisciplinaire. Au plan méthodologique, cette thèse est structurée autour de quatre études de cas locales qui ont subi des menaces de restructurations. Cette collecte a été effectuée dans deux pays (la France et le Canada) et dans un secteur particulier (les équipementiers automobiles). Trois sources qualitatives forment le cœur empirique de cette thèse : des statistiques descriptives, des documents de sources secondaires et des entretiens semi-dirigés (44), principalement avec des acteurs syndicaux. L’analyse intra et inter régime national éclaire plusieurs aspects de la question des stratégies syndicales en contexte de restructurations. Les principales contributions de cette thèse touchent : 1. l’impact des facteurs relationnels et des ressources de pouvoir développées par les syndicats locaux sur les structures d’opportunités institutionnelles; 2. l’importance des aspects « cognitifs » et d’envisager le pouvoir de manière multi-niveaux; 3. l’importance de l’encastrement social et des dynamiques relationnelles entre syndicats et patronats; 4. l’influence de la concurrence internationale/nationale/régionale/locale dans le secteur des équipementiers automobiles; et 5. l’importance des arbitrages et des relations entre les acteurs de l’entreprise par rapport à la théorie de la contingence pour comprendre les marges structurelles des syndicats locaux. Notre recherche invite les acteurs sociaux à repenser leur action dans le cadre des restructurations. En particulier, les syndicats locaux se doivent d’explorer de nouveaux répertoires stratégiques pour répondre aux nombreux défis que posent le changement économique et les restructurations.

Les stratégies syndicales face aux restructurations d’entreprises : une étude comparative des contre-pouvoirs syndicaux dans le secteur des équipementiers automobiles en France et au Canada

Cette thèse tente de comprendre l’impact des restructurations des entreprises multinationales sur les stratégies syndicales. Les acteurs syndicaux locaux sont-ils déterminés par l’appartenance à des régimes nationaux et à des contingences organisationnelles ou peuvent-ils influencer des décisions objectives comme les restructurations ? Cette recherche s’insère dans une problématique large qui fait la jonction entre la mondialisation économique sur une base continentale, la réorganisation productive des entreprises multinationales et l’action syndicale. Au plan théorique, nous confrontons trois grandes approches analytiques, à savoir : le néo-institutionnalisme et les structures d’opportunités ; l’économie politique critique et la question du pouvoir syndical ; la géographie économique critique mettant de l’avant les contingences, l’encastrement et l’espace concurrentiel. Sur la base de ces trois familles, nous présentons un modèle d’analyse multidisciplinaire. Au plan méthodologique, cette thèse est structurée autour de quatre études de cas locales qui ont subi des menaces de restructurations. Cette collecte a été effectuée dans deux pays (la France et le Canada) et dans un secteur particulier (les équipementiers automobiles). Trois sources qualitatives forment le cœur empirique de cette thèse : des statistiques descriptives, des documents de sources secondaires et des entretiens semi-dirigés (44), principalement avec des acteurs syndicaux. L’analyse intra et inter régime national éclaire plusieurs aspects de la question des stratégies syndicales en contexte de restructurations. Les principales contributions de cette thèse touchent : 1. l’impact des facteurs relationnels et des ressources de pouvoir développées par les syndicats locaux sur les structures d’opportunités institutionnelles; 2. l’importance des aspects « cognitifs » et d’envisager le pouvoir de manière multi-niveaux; 3. l’importance de l’encastrement social et des dynamiques relationnelles entre syndicats et patronats; 4. l’influence de la concurrence internationale/nationale/régionale/locale dans le secteur des équipementiers automobiles; et 5. l’importance des arbitrages et des relations entre les acteurs de l’entreprise par rapport à la théorie de la contingence pour comprendre les marges structurelles des syndicats locaux. Notre recherche invite les acteurs sociaux à repenser leur action dans le cadre des restructurations. En particulier, les syndicats locaux se doivent d’explorer de nouveaux répertoires stratégiques pour répondre aux nombreux défis que posent le changement économique et les restructurations.

The Redistribution of Property Rights, Corporate Governance and Company Restructuring after Privatisation"

The project covered the main issues of privatisation, corporate governance and company restructuring after privatisation in Hungary and in the Russian Republic, together with a summary of the broader picture of company-level changes in Central and Eastern Europe, discussing the issues of micro-financial restructuring in the Czech Republic, Hungary, Poland and Slovakia. The two countries selected as the focus of research can be regarded as the two most widely differing cases of the economic transformation in Central and Eastern Europe. Hungary began its transition very early in 1989, while Russia was very late in doing so. Hungary first implemented a series of institutional and systemic reforms before stabilising its public finances, while Russia has struggled with financial stabilisation for years without great success. Company restructuring and the introduction of new forms of governance only began in Russia in the mid-1990s. Hungary opted for "traditional" western methods of privatisation and invited a large amount of foreign direct investment (FDI) while in Russia the bulk of state-owned property was privatised either by free distribution or by a strange blend of ESOP-MBO schemes. FDI in Russia remained modest because of the high risk and uncertainty surrounding economic transactions there. Hungary was a forerunner in privatising public utilities, while Russia has moved cautiously in this area. The group's studies show that the Hungarian economy is now over the "transformation recession" and its economic success is largely due to its successful privatisation and to the dominant participation of foreign investors in company take-overs and in the restructuring process. The study of Russia provides a comprehensive account of the main factors in the so-far modest results in Russian privatisation and economic transformation.

Security of employee entitlements : corporate governance issues

Following the collapse across the last decade of a number of large organizations such as Enron in the USA and several domestic organizations including Ansett Airlines, HIH Insurance and One.Tel, much discussion has ensued about the need to secure employee entitlements. However, tangible improvements in this area are elusive. Good corporate governance policies would suggest that deferred obligations as well as current debts should not be neglected and that appropriate arrangements be put in place to adequately fund employee entitlements. In this paper we consider recent Australian attempts to introduce better governance of employee entitlements.

The impact of the Malaysian code on corporate governance: compliance, institutional investors and stock performance

In 2001, the Malaysian Code on Corporate Governance (MCCG) became an integral part of the Bursa Malaysia Listing Rules, which requires all listed firms to disclose the extent of compliance with the MCCG. Our panel analysis of 440 firms from 1999 to 2002 finds that corporate governance reform in Malaysia has been successful, with a significant improvement in governance practices. The relationship between ownership by the Employees Provident Fund (EPF) and corporate governance has strengthened during the period subsequent to the reform, in line with the lead role taken by the EPF in establishing the Minority Shareholders Watchdog Group. The implementation of MCCG has had a substantial effect on shareholders' wealth, increasing stock prices by an average of about 4.8%. Although there is no evidence that politically connected firms perform better, political connections do have a significantly negative effect on corporate governance, which is mitigated by institutional ownership.

Structuring and restructuring nonprofit associations

In the mid seventies there was a spate of legal claims involving unincorporated not-for-profit associations. These claims highlighted the liability exposure of management committee members and prompted a dramatic increase in the number of associations seeking shelter behind the corporate veil. Corporate structure decisions during this period were primarily motivated by the incentive of limited liability. Twenty years later, the not-for-profit sector is subject to new challenges. The Industry Commission Report into Charitable Organisations in Australia heralds an increasing intrusion of legislative responsibilities and reform in the sector. The traditional sources of funds for not-for-profit organisations are about to radically change with the advent of “competitive tendering” for government funding and the declining benevolence of society. The legal scuffle between Australian Rugby Football League Limited (the “ARL”) and News Limited has also exposed the vulnerability of not-for-profit groups and the many legal and commercial minefields in structural decision-making. The sector is beginning to respond to these pressures by rationalisation and restructure. Corporate structure decisions are now motivated by the need to promote efficiency and resilience. Survival of the fittest. Restructuring is by no means a task for the faint-hearted. A delicate balance between legality and practicality needs to be maintained. The focus of this paper is on the restructuring choices for not-for-profit organisations and groups in Queensland. It answers “how-to” questions and identifies some important restructuring issues.

Retailer-driven agricultural restructuring - Australia, the UK and Norway in comparison

In recent decades, the governance of food safety, food quality, on-farm environmental management and animal welfare has been shifting from the realm of 'the government' to that of the private sector. Corporate entities, especially the large supermarkets, have responded to neoliberal forms of governance and the resultant 'hollowed-out' state by instituting private standards for food, backed by processes of certification and policed through systems of third party auditing. Today's food regime is one in which supermarkets impose 'private standards' along the food supply chain to ensure compliance with a range of food safety goals-often above and beyond those prescribed by government. By examining regulatory governance in Australia, Norway and the United Kingdom we highlight emerging trajectories of food governance. We argue that the imposition of the new private forms of monitoring and compliance continue the project of agricultural restructuring that began with government support for structural adjustment schemes in agriculture and that these are most evident in the UK and Australia where neoliberalism is an entrenched philosophy. However, despite Norway's identity as a social democracy, we also identify neoliberal 'creep' into the system of food governance. Small-scale producers in all three nations are finding themselves increasingly subject to governance through private, market-based mechanisms that, to varying degrees, are dominated by major supermarket chains. The result is agricultural restructuring not through the traditional avenues of elected governments, but via non-elected market operatives.

Supermarkets’ governance of the agri-food supply chain : is the ‘corporate-environmental’ food regime evident in Australia?

This article investigates the extent to which the purported greening of food retailing and consumption in Australia is consistent with the development of a corporate-environmental food regime. Recent developments in food regime theory, particularly the concept of an emerging third food regime (the so-called ‘corporate-environmental food regime’), provide a useful organizing framework for understanding recent agri-restructuring trends. We find that, while a globally based, third food regime is becoming more apparent, the attributes that relate to corporate retail-driven greening of the supply chain are less evident within Australia’s domestic market than in its EU counterparts. However, there is some evidence that Australia’s export market is subject to some degree of ‘greening at a distance’ due to private regulations imposed by supermarkets overseas. We argue that while broader agri-restructuring trends may be evident at an international level, elements of greening specific to national contexts are important for determining the trajectory of any third food regime.

Restructuring arts and cultural funding in Tanzania : expectations and impasses

In 1984, the Tanzanian government established the Tanzania Culture Trust Fund (TCTF) – well known as ‘Mfuko’ – with the support of the Swedish government. The focus of Mfuko was to enable the arts and cultural sector to strengthen its position through grant allocations. However, rural artists have limited opportunity to access financial support to strengthen their works. The challenge remains: how to restructure arts and cultural funding in line with cutting dependence on foreign aid. This article reports on the research findings of a case study based on ‘Strategies for youth employment in Tanzania: A creative industries approach’. The study was undertaken in Dar-Es-Salaam, Bagamoyo, Dodoma, Lindi and Morogoro from July to October, 2012. This study employed mixed me thods incorporating questionnaires, interviews, and focus groups. This paper argues that lack of deliberate initiatives to restructure arts and cultural funding (in line with cutting dependence on foreign assistance) have prevented artists from fulfilling their desire for better lives. Hence, the severe lack of financial support to the artists remains a challenge to meeting the Millennium Development Goals and Tanzania Development Vision 2025. Although this discussion is specific to Tanzania, the significance and contribution of this case may apply to other developing countries.

Corporate Funding on the European Debt Capital Market

The integrated European debt capital market has undoubtedly broadened the possibilities for companies to access funding from the public and challenged investors to cope with an ever increasing complexity of its market participants. Well into the Euro-era, it is clear that the unified market has created potential for all involved parties, where investment opportunities are able to meet a supply of funds from a broad geographical area now summoned under a single currency. Europe’s traditionally heavy dependency on bank lending as a source of debt capital has thus been easing as corporate residents are able to tap into a deep and liquid capital market to satisfy their funding needs. As national barriers eroded with the inauguration of the Euro and interest rates for the EMU-members converged towards over-all lower yields, a new source of debt capital emerged to the vast majority of corporate residents under the new currency and gave an alternative to the traditionally more maturity-restricted bank debt. With increased sophistication came also an improved knowledge and understanding of the market and its participants. Further, investors became more willing to bear credit risk, which opened the market for firms of ever lower creditworthiness. In the process, the market as a whole saw a change in the profile of issuers, as non-financial firms increasingly sought their funding directly from the bond market. This thesis consists of three separate empirical studies on how corporates fund themselves on the European debt capital markets. The analysis focuses on a firm’s access to and behaviour on the capital market, subsequent the decision to raise capital through the issuance of arm’s length debt on the bond market. The specific areas considered are contributing to our knowledge in the fields of corporate finance and financial markets by considering explicitly firms’ primary market activities within the new market area. The first essay explores how reputation of an issuer affects its debt issuance. Essay two examines the choice of interest rate exposure on newly issued debt and the third and final essay explores pricing anomalies on corporate debt issues.

Comparative Lessons on Corporate law and CSR: Hard Law as Solution? Do the French offer the way ahead?

This paper provides a comparative analysis of corporate law and CSR and asks whether there are lessons for Australia from corporate law and CSR developments in France. This presentation presents a summary of the provisions of the new French Act Number 2010-788 passed on 12 July 2010 – called “Grenelle 2” –. Firstly, article 225 of Law’s Grenelle 2 changes the Commercial Code to extend the reach of non-financial reporting and to ensure its pertinence. Secondly, article 227 Law’s Grenelle 2 amends certain provisions of the Commercial and Environmental Codes and incorporates into substantive law the liability of parent companies for their subsidiaries. In fine, article 224 of Law’s Grenelle 2 reinforces the pressure on the market to act in a responsible manner. It modifies article 214-12 of the Monetary and Financial Code in order to compel institutional investors (mutual funds and fund management companies) to take social, environmental and governance criteria into account in their investment policy.

`Zealotry or nostalgic regret`? women leaders in technical and further education in Australia : agents of change, entrepreneurial educators or corporate citizens?

Education has been restructured in many Western post-industrial nation states during the 1990s. The Australian Technical and Further Education sector (TAFE) has been particularly susceptible to discourses of responsiveness to the market and the new entrepreneuralism. This article explores how women have been repositioned in contradictory and ambiguous ways as the new entrepreneurial middle managers by existing and emergent discourses that circulated in and through TAFE organizations. In turn, it points to how discourses of change management and client responsiveness took on particular readings within specific institutional and professional cultures of the eight Technical and Further Education institutions (TAFEs). At the same time, the restructuring that arose from the corporatization of TAFE, in a highly gendered process, through the twin strategies of marketization and the new managerialism produced new possibilities for individual women educators who moved up into middle management. Yet these individual women were positioned within highly masculinist 'neo-corporate bureaucratic cultures' that co-opted their passion for the capacity of education to make a difference and incorporated these new entrepeneurial work identities.

The transnational corporation, corporate social responsibility and the 'outsourcing' debate

Current popular debates in the United States and Australia on the topics of 'jobless recoveries' and the 'outsourcing' of skilled IT jobs to India (most conspicuously) evidence a confusion as to the institutional role of the business firm and its obligations to the broader stakeholder community, as well as to the more specific differences between outsourcing and the spatial restructuring of corporate value-chains. This paper will take up several issues in the hope of clarifying this confusion, including the essential nature of the business firm as an economic, political and social institution; the possibilities for social responsibility and stakeholder management in large internationalised firms; and the critical distinctions between domestic and international outsourcing and spatial restructuring. Data from the 'outsourcing' debate will be referenced to illustrate the differing logics/rationalities of relevant stakeholder groups.