Shareholder values, not shareholder value : the role of 'ethical funds' and 'ethical entrepreneurs' in connecting shareholders' values with their investments

This article rebuts the still-common assumption that managers of capitalist entities have a duty, principally or even exclusively, to maximise the monetary return to investors on their investments. It argues that this view is based on a misleadingly simplistic conception of human values and motivation. Not only is acting solely to maximise long-term shareholder value difficult, it displays, at best, banal single-mindedness and, at worst, sociopathy. In fact, real investors and managers have rich constellations of values that should be taken account of in all their decisions, including their business decisions. Awareness of our values, and public expression of our commitment to exemplify them, make for healthier investment and, in the long term, a healthier corporate world. Individuals and funds investing on the basis of such values, in companies that express their own, display humanity rather than pathology. Preamble I always enjoyed the discussions that Michael Whincop and I had about the interaction of ethics and economics. Each of us could see an important role for these disciplines, as well as our common discipline of law. We also shared an appreciation of the institutional context within which much of the drama of life is played out. In understanding the behaviour of individuals and the choices they make, it seemed axiomatic to each of us that ethics and economics have a lot to say. This was also true of the institutions in which they operate. Michael ·had a strong interest in 'the new institutional economics' I and I had a strong interest in 'institutionalising ethics' right through the 1990s.' This formed the basis of some fascinating and fruitful discussions. Professor Charles Sampford is Director, Key Centre for Ethics, Law, Justice and Governance, Foundation Professor of Law at Griffith University and President, International Institute for Public Ethics.DrVirginia Berry is a Research Fellow at theKey Centre for Ethics, Law,Justice andGovernance, Griffith University. Oliver Williamson, one of the leading proponents of the 'new institutional economics', published a number of influential works - see Williamson (1975, 1995,1996). Sampford (1991),' pp 185-222. The primary focus of discussions on institutionalising ethics has been in public sectorethics: see, for example, Preston and Sampford (2002); Sampford (1994), pp 114-38. Some discussion has, however, moved beyond the public sector to include business - see Sampford 200408299

Portfolio size effect in retirement accounts : what does it imply for lifecycle asset allocation funds?

Lifecycle funds offered by retirement plan providers allocate aggressively to risky asset classes when the employee participants are young, gradually switching to more conservative asset classes as they grow older and approach retirement. This approach focuses on maximizing growth of the accumulation fund in the initial years and preserving its value in the later years. The authors simulate terminal wealth outcomes based on conventional lifecycle asset allocation rules as well as on contrarian strategies that reverse the direction of asset switching. The evidence suggests that the growth in portfolio size over time significantly impacts the asset allocation decision. Due to the portfolio size effect that is observed by the authors, the terminal value of accumulation in retirement accounts is influenced more by the asset allocation strategy adopted in later years relative to that adopted in early years. By mechanistically switching to conservative assets in the later years of a plan, lifecycle strategies sacrifice significant growth opportunity and prove counterproductive to the participant's wealth accumulation objective. The authors' conclude that this sacrifice does not seem to be compensated adequately in terms of reducing the risk of potentially adverse outcomes.

The constitutional power to make war: domestic legal issues raised by Australia's action in Iraq

The legal power to declare war has traditionally been a part of a prerogative to be exercised solely on advice that passed from the King to the Governor-General no later than 1942. In 2003, the Governor- General was not involved in the decision by the Prime Minister and Cabinet to commit Australian troops to the invasion of Iraq. The authors explore the alternative legal means by which Australia can go to war - means the government in fact used in 2003 - and the constitutional basis of those means. While the prerogative power can be regulated and/or devolved by legislation, and just possibly by practice, there does not seem to be a sound legal basis to assert that the power has been devolved to any other person. It appears that in 2003 the Defence Minister used his legal powers under the Defence Act 1903 (Cth) (as amended in 1975) to give instructions to the service head(s). A powerful argument could be made that the relevant sections of the Defence Act were not intended to be used for the decision to go to war, and that such instructions are for peacetime or in bello decisions. If so, the power to make war remains within the prerogative to be exercised on advice. Interviews with the then Governor-General indicate that Prime Minister Howard had planned to take the matter to the Federal Executive Council 'for noting', but did not do so after the Governor-General sought the views of the then Attorney-General about relevant issues of international law. The exchange raises many issues, but those of interest concern the kinds of questions the Governor-General could and should ask about proposed international action and whether they in any way mirror the assurances that are uncontroversially required for domestic action. In 2003, the Governor-General's scrutiny was the only independent scrutiny available because the legality of the decision to go to war was not a matter that could be determined in the High Court, and the federal government had taken action in March 2002 that effectively prevented the matter coming before the International Court of Justice

Raised Floor System applications for refurbishing office spaces

While raised floors as a building component has been around since the 70's, its application in terms of a holistic system in the fit-out of commercial office buildings has not been fully embraced due to some inherent problems and negative perceptions of the stakeholders involved. Today, the new generation of raised floor systems(RFS) offers a suite of innovative and integrated products and solutions, and as such are not only suitable for the changing office space requirements, but also capable of meeting tbe smart and sustainable challenges, which are becoming the prerequisite in the refurbishment of existing buildings. As there has been a prediction for continued growth in refurbishment projects in major cities around the globe, RFS as an alternative methodology warrants new examination and highlight. This paper introduces research recently completed in Australia that provided a holistic approach to the application of RFS enabled by intelligent building technologies, and examined key issues of project development when refurbishing commercial office buildings. It focuses on the constructability of RFS, and how it will respond to smart feature requirements in buildings while extending service life, meeting new organisational change and workplace health needs for applications in today's office environment. It also introduces key project procurement issues and the integrated decision support when dealing with the refurbishment of office buildings. The paper recommends procurement strategies as well as the justification of adopting the RFS technology in the Australian office building sector. Given the current economic downturn, refitting as opposed to new build .projects will come onto the spotlight. This paper will provide valuable information for building owners and developers alike when contemplating the retrofit of office buildings.

An analysis of parliamentary questions raised by Opposition in the Uttar Pradesh (India) State Legislative Assembly

The use of parliamentary questions is the most popular and visible tool in the hands of the Opposition as a means to make government accountable. Their main purpose is to seek information or press for action. Contemporary parliamentary literature from the UK, Canada, and Australia, however, suggests that parliamentary questions have lost their effectiveness. The literature points out that Question Time in parliaments has become a battle ground between Ruling and Opposition parties in their fight to gain maximum political advantage. In this context, the effectiveness of parliamentary questions in the Indian state legislatures has not been investigated. The aim of this study, therefore, is to analyse the use, purpose and effectiveness of parliamentary questions in the State Legislative Assembly of Uttar Pradesh (India) to explore differences, if any, between Ruling and Opposition parties. In this study, 4023 parliamentary questions asked in the Uttar Pradesh State Legislative Assembly were analysed. The effectiveness of answers was also analysed qualitatively. The results show that half of the total members of the Assembly used this device, out of which 60% of the questions were asked by the Opposition party members. 31% of the questions from the Opposition were seeking information and 69% were pressing for action. The government provided the required information in 96% of the questions in the former category and took action in only 35% of the latter category. Furthermore, 60% of the questions raised by the Opposition were related to constituency matters and the remaining 40% were related to policy issues or public welfare. Comparing the data with the ruling party, the results indicate that the use,purpose and effectiveness of parliamentary questions were similar to that of the Opposition except some minor differences. Surprisingly, there was no evidence of any ‘Dorothy Dix’ questions. The study concludes parliamentary question is an effective device in the Indian state of Uttar Pradesh.

Should funds invest in socially responsible investments during downturns?

Purpose: This paper investigates whether Socially Responsible Investment (SRI) is less sensitive to market downturns than conventional investments; the legal implications for fund managers and trustees; and possible legislative reforms to allow conventional funds more scope to invest in SRI. ----- ----- Design/methodology/approach: The paper uses the market model to estimate betas over the past 15 years for SRI funds and conventional investment funds during economic downturns, as distinct from during more ‘normal’ (non-recessionary) economic times. ----- ----- Findings: The beta risk of SRI, both in Australia and internationally, increases more than that of conventional investment during economic downturns. Traditional fund managers and trustees in Australia are therefore likely to breach their fiduciary duties if they go long - or remain long - in SRI funds during economic downturns, unless relevant legislation is reformed. ----- ----- Research limitations/implications: The methodology assumes that alpha and beta in the market model are constant. This is the subject of ongoing research. Second, it categorises the state of the market into ‘normal’ economic conditions and downturns using dummy variables. More sophisticated techniques could be used in future research. ----- ----- Practical implications: The current law would prevent conventional funds from investing in SRI. If SRI is viewed as socially desirable, useful legislative reforms could include explicitly overriding the common law to allow conventional funds to invest in SRI; introducing a 150% tax deduction or investment allowance for SRI; and allowing SRI sub-funds to obtain Deductible Gift Recipient status from the Australian Tax Office and other taxation authorities. ----- ----- Originality/value: The accurate assessment of risk in SRIs is an area which, despite its serious legal implications, is yet to be subjected to rigorous empirical investigation. Keywords - SRI, market model, GARCH, trust fund, fiduciary duties, market downturns, Australia.

Timeliness and Clinical Impact of Hospital-Initiated Medication Reviews

Background: Medication-related problems often occur in the immediate post-discharge period. To reduce medication misadventure the Commonwealth Government funds home medicines reviews (HMRs). HMRs are initiated when general practitioners refer consenting patients to their community pharmacists, who then engage accredited pharmacists to review patients' medicines in their homes. Aim: To determine if hospital-initiated medication reviews (HIMRs) can be implemented in a more timely manner than HMRs; and to assess the impact of a bespoke referral form with comorbidity-specific questions on the quality of reports. Method: Eligible medical inpatients at risk of medication misadventure were referred by the hospital liaison pharmacist to participating accredited pharmacists post-discharge from hospital. Social, demographic and laboratory data were collected from medical records and during interviews with consenting patients. Issues raised in the HIMR reports were categorised: intervention/action, information given or recommendation, and assigned a rank of clinical significance. Results: HIMRs were conducted within 11.6 6.6 days postdischarge. 36 HIMR reports were evaluated and 1442 issues identified - information given (n = 1204), recommendations made (n = 88) and actions taken (n = 150). The majority of issues raised (89%) had a minor clinical impact. The bespoke referral form prompted approximately half of the issues raised. Conclusion: HIMRs can be facilitated in a more timely manner than post-discharge HMRs. There was an associated positive clinical impact of issues raised in the HIMR reports.

Mathematics funds of knowledge : sotmaute and sermaute fish in a Torres Strait Islander community

The purpose of this article is to describe a project with one Torres Strait Islander Community. It provides some insights into parents’ funds of knowledge that are mathematical in nature, such as sorting shells and giving fish. The idea of funds of knowledge is based on the premise that people are competent and have knowledge that has been historically and culturally accumulated into a body of knowledge and skills essential for their functioning and well-being. This knowledge is then practised throughout their lives and passed onto the next generation of children. Through adopting a community research approach, funds of knowledge that can be used to validate the community’s identities as knowledgeable people, can also be used as foundations for future learnings for teachers, parents and children in the early years of school. They can be the bridge that joins a community’s funds of knowledge with schools validating that knowledge.

Meeting under the “Omei” Tree in the Torres Strait Islands : networks and funds of knowledge of mathematical ideas

This paper focuses on the turning point experiences that worked to transform the researcher during a preliminary consultation process to seek permission to conduct of a small pilot project on one Torres Strait Island. The project aimed to learn from parents how they support their children in their mathematics learning. Drawing on a community research design, a consultative meeting was held with one Torres Strait Islander community to discuss the possibility of piloting a small project that focused on working with parents and children to learn about early mathematics processes. Preliminary data indicated that parents use networks in their community. It highlighted the funds of knowledge of mathematics that exist in the community and which are used to teach their children. Such knowledges are situated within a community’s unique histories, culture and the voices of the people. “Omei” tree means the Tree of Wisdom in the Island community.

Two sides of seeking funding : grants and deposit funds

Before even thinking of approaching charitable trusts for funding, consideration needs to be given to a whole range of issues. As with many endeavours, preparation paves the way for success...

Residential property investment : assessing home ownership long term viability

Home purchase and ownership is seen by the majority of Australians as the basis for a sound investment strategy and to seciure their long term retirement goals. Although home ownership rates in Australia are in excess of 65% of the population, there have been doubts raised as to the effectiveness of purchasing a house as the main source of retirement income. The main issue with this approach is that the house has to be sold to gain access to these funds or the owners have to take out a reverse mortgage to access the capital tied up in their home, which can be more expensive than selling. This paper will carryout a detailed analysis of a number of investment options to determine the effectiveness of home purchase as a long term investment vehicle. This study has found that the long term investment in equities or managed superannuation funds can provide a greater retirement income than the purchase of a residential property for owner occupation

Funds of knowledge of sorting and patterning : networks of exchange in a Torres Strait Island community

The purpose of this article is to describe a project with one Torres Strait Islander Community. It provides some insights into parents’ funds of knowledge that are mathematical in nature, such as sorting shells and giving fish. The idea of funds of knowledge is based the premise that people are competent and have knowledge that has been historically and culturally accumulated into a body of knowledge and skills essential for their functioning and well-being. This knowledge is then practised throughout their lives and passed onto the next generation of children. Through using a community research approach, funds of knowledge that can be used to validate the community’s identities as knowledgeable people, can be used as foundations for future learnings for teachers, parents and children in the early years of school. They can be the bridge that joins a community’s funds of knowledge with schools validating that knowledge.