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

Closing the cultural distance gap: managing value-based knowledge in MNC by using MEP

Today more than ever, generating and managing knowledge is an essential source of competitive advantage for every organization, and particularly for Multinational corporations (MNC). However, despite the undisputed agreement about the importance of creating and managing knowledge, there are still a large number of corporations that act unethically or illegally. Clearly, there is a lack of attention in gaining more knowledge about the management of ethical knowledge in organizations. This paper refers to value-based knowledge, as the process of recognise and manage those values that stand at the heart of decision-making and action in organizations. In order to support MNCs in implementing value-based knowledge process, the managerial ethical profile (MEP) has been presented as a valuable tool to facilitate knowledge management process at both the intra-organizational network level and at the inter-organizational network level.

Up the junction? Exploiting knowledge-based development through supply chain and SME cluster interactions

Maximisation of Knowledge-Based Development (KBD) benefits requires effective dissemination and utilisation mechanisms to accompany the initial knowledge creation process. This work highlights the potential for interactions between Supply Chains (SCs) and Small and Medium sized Enterprise Clusters (SMECs), (including via ‘junction’ firms which are members of both networks), to facilitate such effective dissemination and utilisation of knowledge. In both these network types there are firms that readily utilise their relationships and ties for ongoing business success through innovation. The following chapter highlights the potential for such beneficial interactions between SCs and SMECs in key elements of KBD, particularly knowledge management, innovation and technology transfer. Because there has been little focus on the interactions between SCs and SMECs, particularly when firms simultaneously belong to both, this chapter examines the conduits through which information and knowledge can be transferred and utilised. It shows that each network type has its own distinct advantages in the types of information searched for and transferred amongst network member firms. Comparing and contrasting these advantages shows opportunities for both networks to leverage the knowledge sharing strengths of each other, through these ‘junctions’ to address their own weaknesses, allowing implications to be drawn concerning new ways of utilising relationships for mutual network gains.

Place value, multiplicativity, reunitizing and effective classroom teaching of decimal numeration

Student understanding of decimal number is poor (e.g., Baturo, 1998; Behr, Harel, Post & Lesh, 1992). This paper reports on a study which set out to determine the cognitive complexities inherent in decimal-number numeration and what teaching experiences need to be provided in order to facilitate an understanding of decimal-number numeration. The study gave rise to a theoretical model which incorporated three levels of knowledge. Interview tasks were developed from the model to probe 45 students’ understanding of these levels, and intervention episodes undertaken to help students construct the baseline knowledge of position and order (Level 1 knowledge) and an understanding of multiplicative structure (Level 3 knowledge). This paper describes the two interventions and reports on the results which suggest that helping students construct appropriate mental models is an efficient and effective teaching strategy.

Learning barriers in continuous product innovation

In today's dynamic and turbulent environment companies are required to increase their effectiveness and efficiency, exploit synergy and learn product innovation processes in order to build competitive advantage. To be able to stimulate and facilitate learning in product innovation, it is necessary to gain an insight into factors that hinder learning and to design effective intervention strategies that may help remove barriers to learning. This article reports on learning barriers identified by product innovation managers in over 70 companies in the UK, Ireland, Italy, Netherlands, Sweden and Australia. The results show that the majority of the barriers identified can be labelled as organisational defensive routines leading to a chain of behaviours; lack of resources leads to under-appreciation of the value of valid information, absence of informed choice and lack of personal responsibility. An intervention theory is required which enables individuals and organisations to interrupt defensive patterns in ways that prevents them from recurring.

Forecasting time-varying value-at-risk

In this thesis we are interested in financial risk and the instrument we want to use is Value-at-Risk (VaR). VaR is the maximum loss over a given period of time at a given confidence level. Many definitions of VaR exist and some will be introduced throughout this thesis. There two main ways to measure risk and VaR: through volatility and through percentiles. Large volatility in financial returns implies greater probability of large losses, but also larger probability of large profits. Percentiles describe tail behaviour. The estimation of VaR is a complex task. It is important to know the main characteristics of financial data to choose the best model. The existing literature is very wide, maybe controversial, but helpful in drawing a picture of the problem. It is commonly recognised that financial data are characterised by heavy tails, time-varying volatility, asymmetric response to bad and good news, and skewness. Ignoring any of these features can lead to underestimating VaR with a possible ultimate consequence being the default of the protagonist (firm, bank or investor). In recent years, skewness has attracted special attention. An open problem is the detection and modelling of time-varying skewness. Is skewness constant or there is some significant variability which in turn can affect the estimation of VaR? This thesis aims to answer this question and to open the way to a new approach to model simultaneously time-varying volatility (conditional variance) and skewness. The new tools are modifications of the Generalised Lambda Distributions (GLDs). They are four-parameter distributions, which allow the first four moments to be modelled nearly independently: in particular we are interested in what we will call para-moments, i.e., mean, variance, skewness and kurtosis. The GLDs will be used in two different ways. Firstly, semi-parametrically, we consider a moving window to estimate the parameters and calculate the percentiles of the GLDs. Secondly, parametrically, we attempt to extend the GLDs to include time-varying dependence in the parameters. We used the local linear regression to estimate semi-parametrically conditional mean and conditional variance. The method is not efficient enough to capture all the dependence structure in the three indices —ASX 200, S&P 500 and FT 30—, however it provides an idea of the DGP underlying the process and helps choosing a good technique to model the data. We find that GLDs suggest that moments up to the fourth order do not always exist, there existence appears to vary over time. This is a very important finding, considering that past papers (see for example Bali et al., 2008; Hashmi and Tay, 2007; Lanne and Pentti, 2007) modelled time-varying skewness, implicitly assuming the existence of the third moment. However, the GLDs suggest that mean, variance, skewness and in general the conditional distribution vary over time, as already suggested by the existing literature. The GLDs give good results in estimating VaR on three real indices, ASX 200, S&P 500 and FT 30, with results very similar to the results provided by historical simulation.

Value-mapping inputs

This research aims to increase understanding of and delivery to qualitative (or intangible) outcomes and impacts of major economic infrastructure projects (i.e. bridges, roads, water infrastructure and the like), and the role of stakeholder engagement in this process.-------- Recent doctoral research completed at the Queensland University of Technology by the author investigated how the principles of corporate responsibility are applied in the construction sector. This related specifically to major economic infrastructure projects (hereafter referred to as major projects), with particular regard to urban transportation projects. One outcome of this past research was a value-mapping framework which enables organisations to track project outcomes to pre-existing corporate objectives, and report on these throughout the project life-cycle. Two recommendations for future research from that work formed the basis for this current research: • How can qualitative measurables be better integrated into decision-making on major economic infrastructure projects? • How can non-contractual stakeholders be more effectively engaged with on these projects? The link between these two areas may relate to the stakeholders’ role in qualitative indicator identification and measurement. This is a key point for future investigation.---------- The aim of this research is thus to further investigate these two areas, with the intent of (i) better defining the research direction; (ii) identifying potential research partners; and (iii) identify possible sources of future funding.

An ESR study of irradiated poly(tetrafluoroethylene-co-perfluoropropyl vinyl ether) (PFA)

Poly(tetrafluoroethylene-co-perfluoropropyl vinyl ether) (PFA) with 2 mol% perfluoropropyl vinyl ether (PPVE) was exposed to γ-irradiation in vacuum at both 77 K and room temperature and the ESR spectra recorded. Both the main chain, CF2–C.F–CF2, and end chain, CF2C.F2 radicals were identified at both temperatures and their thermal stabilities measured. No radicals unique to the radiolytic cleavage at the PPVE units were observed at room temperature, either due to the low concentration of the comonomer or β-scission to form a chain end radical and a non-radical species. G-values for radical formation at room temperature and 77 K were found to be 0.93 and 0.16, respectively.

IT-enhanced communication protocols for building project management

Purpose – Building project management requires real time flow of information between all the project team members or the supply chain members. In the present scenario, when project participants are geographically separated, adoption of Information Communication Technology (ICT) enables such effective communication. But strategic adoption of ICT requires that all the supply chain members follow the accepted methods of communication or the communication protocols. The majority of the construction organizations are small and medium enterprises (SMEs). This research, therefore, proposes to focus on developing IT-enhanced communication protocols for building project management by SMEs. Design/methodology/approach – The research adopts a sequential mixed methods approach, where data collection and analysis are conducted in both the quantitative and qualitative phases of research. Findings – The protocols are proposed as a “Strategic Model for Enhancing ICT Diffusion in Building Projects”. The framework for the model is discussed at three levels of study, i.e industry, organization, and people. Practical implications – While the research was conducted in an Indian context, the research outcome is envisaged to be widely applicable in other countries with due considerations. Originality/value – The developed framework has implications for national level bodies and academic institutions, organizations, people or project managers and is applicable at the international level after due considerations.

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.