Invisible ties : implicit contracting and its implications for the agency relationship in corporate governance research

Research that applies agency theory to boards of directors suffers from being quite narrow as it does not recognize the true legal relationships between directors, managers and shareholders. Instead, the board of directors is best conceptualized as the principal, management as agents and stockholders’ relationships as a mix of legal and implicit contracts. We propose a recast agency relationship and develop a contingency approach that proposes (1) how a corporation’s goals vary with a board’s implicit contracting and (2) a reconceptualization of the agency problem facing boards.

Corporate Environmental and Economic Performance of Japanese Manufacturing Firms: Empirical Study for Sustainable Development

This study examines the relationship between environmental performance and economic performance in Japanese manufacturing firms. The environmental performance indicators include CO2 emissions and the aggregate toxic risk associated with chemical emissions relative to sales. Return on assets (ROA) is used as an indicator of economic performance. We demonstrate that there is a significant inverted U-shaped relationship between ROA and environmental performance calculated by aggregated toxic risk. We also find that the environmental performance increases ROA through both returns on sales and improved capital turnover. However, we observe a significant positive relationship between financial performance and environmental performance based on CO2 emissions. These findings may provide evidence for the consequences of firms' environmental behavior and sustainable development. © 2012 John Wiley & Sons, Ltd and ERP Environment.

Digital culture : blurred boundaries and ethical considerations

The Weberian sense of work and life suggests that working is something around which the rest of life flows. Moreover, work life and domestic life have been defined as separate for most people based on physical structures. That is, being physically in a building at work limited your ability to interact with those who are not nearby – not part of work. As such, social conventions regarding the uses of media at work have become part of our cultural sensibilities – we “know” it is not proper to have romantic discourse over the office phone, much less romance during work! Doing so becomes news. Yet, despite the construction of such distinctions, these workspaces and places have always been difficult to render as such. For example, one might consider the relatively recent development of teleworking from the 1980s or the “putting out system”[1] which dates back to the 1400s – both requiring work in the home. The papers in this special issue draw our attention to some of the ethical issues raised by the growing pervasiveness of information and communications technologies (ICTs) in our everyday lives and the fact that it is becoming increasingly difficult to make distinctions between being somewhere (like work) and being away from some things (like one’s friends, social interests and other parts of life that are not integrated into this space or place [2] )...

Crowdsourcing in developing countries : a possible model to co-create with the poor

The interest in poverty and the moral sense of'helping the poor' are a constant topic in Western culture (Mayo 2009).ln recent years, multinational corporations (MNCs) have evolved in their understanding of how social issues, such as poverty alleviation, relate to their fundamental purposes. From a business strategy point of view, 'socially responsible' initiatives are generally born with lhe dual purpose of attaining social visibility (i.e. marketing) and increasing economic returns. Besides addressing social challenges as part of their corporate social responsibility strategies, MNCs have also begun 'selling to the poor' in emerging markets (Prahalad 2004). A few forward -looking companies consider tltis base of the pyramid (BOP) market also as a source of innovation and have started to co-create with consumers (Simanis and Hart 2008).

Turnbull : generating undue expectations of the corporate governance role of audit committees

Following an initial consultation draft (Turnbull 1999a), the Internal control Working Party of the Institute of Chartered Accountants in England and Wales, chaired by Nigel Turnbull, executive director of Rank Group plc. has published Internal Control: Guidance for Directors of Listed companies Incorporated in the UK (Turnbull, 1999b). The guidance is commonly referred to as the Turnbull Report. This paper outlines the key recommendations of the report and discusses some of its implications, particularly in the context of the increasing emphasis on a broader corporate governance role for audit committees. The paper suggests that the increasing role envisaged of audit committees for example lately in the UK by Turnbull, may generate undue expectations are premised on an unsubstantiated notion of the contribution of audit committees.

Public policy on corporate audit committees : case study evidence of current practice

Corporate failures and malpractices have led to an increasing emphasis on the governance role of audit committees. The Smith report Audit Committee Combined Code Guidance and the Higgs Review of the Role and Effectiveness of Non-Executive Directors (now incorporated in a Revised Combined Code) represent further attempts to strengthen corporate accountability in the UK. Although the regulatory focus on audit committees indicates confidence in their role as part of the solution to governance failures, questions remain about their efficacy in practice. Against the background of the publication of the Smith report and the wider reliance on audit committees in several countries to help improve corporate accountability, this paper provides research evidence, drawn from an ACCA-sponsored project, on the processes and effects of the audit committees in three UK companies. This study complements other research on audit committees by adopting a case study approach, in order to reflect the importance of investigating audit committee operations from within the organisation and to develop a closer understanding of audit committee impact than is available from generally observable data. The empirical evidence for the case studies was obtained from semi-structured interviews with personnel involved in the audit committee process, internal documents made available by the companies, and publicly available information, including annual reports.

The corporate governance effects of audit committees

Arguments associated with the promotion of audit committees in many countries are premised on their potential for alleviating weaknesses in corporate governance. This paper provides a synthesis and evaluation of empirical research on the governance effects associated with audit committees. Given recent policy recommendations in several countries aimed at strengthening these committees, it is important to establish what research evidence demonstrates about their existing governance contribution. A framework for analyzing the impact of audit committees is described, identifying potential perceived effects which may have led to their adoption and documented effects on aspects of the audit function, on financial reporting quality and on corporate performance. It is argued that there is only limited and mixed evidence of effects to support claims and perceptions about the value of audit committees for these elements of governance. It is also shown that most of the existing research has focused on factors associated with audit committee existence, characteristics and measures of activity and there is very little evidence on the processes associated with the operation of audit committees and the manner in which they influence organizational behaviour. It is clear that there is no automatic relationship between the adoption of audit committee structures or characteristics and the achievement of particular governance effects, and caution may be needed over expectations that greater codification around factors such as audit committee members’ independence and expertise as the means of ‘‘correcting’’ past weaknesses in the arrangements for audit committees. The most fundamental question concerning what difference audit committees make in practice continues to be an important area for research development. For future research we suggest: (i) greater consideration of the organizational and institutional contexts in which audit committees operate; (ii) explicit theorization of the processes associated with audit committee operation; (iii) complementing extant research methods with field studie, and; (iv) investigation of unintended (behavioural) as well as expected consequences of audit committees.

Organisational culture, change readiness and retention : a human services perspective

The Third Sector is experiencing unprecedented change as nonprofit organisations pursue their mission, organisational excellence and sustainability. This research collected data from employees of Australian nonprofit human service organisations. Instruments to measure organisational culture and change readiness were validated. The relationships between perceptions of organisational cultures, change readiness, job satisfaction and intentions to leave were explored. Findings indicate flexible organisational cultures influence employee attitudes more positively than control cultures. It identified that leaders have a significant role to play in developing and fostering change readiness and job satisfaction. This improves employees' adaptation to change, increases staff retention and organisational sustainability.

Capital-C culture : the perfect American at the Brisbane Festival

A review of Philip Glass's opera The Perfect American. The Brisbane Festival’s production of Philip Glass’s opera The Perfect American is only the third production of the 2012 work ever to be staged. That’s quite a coup for the Brisbane Festival and Opera Queensland. The Perfect American was commissioned by Madrid’s Teatro Real and London’s English National Opera to mark the American composer’s 75th birthday. Glass’s telling of the Disney myth focuses on the final stages of Walt Disney’s life and career – a high art critique of a popular culture icon...

Experience indigenous culture in Arnhem Land, NT

A travel article about a journey to the Cobourg Peninsula, Arnhem Land. "NOW I know I'm back,'' says our guide David McMahon as the scent of wood smoke makes its way into the 4WD. For McMahon, being back means Kakadu and Arnhem Land, and ultimately our final destination in the Northern Territory's Cobourg Peninsula. In the north, one of the first things you need to adjust is your attitude to fire. The indigenous people have long worked with it. The rangers perform controlled burns. The animals have adapted and know how to escape the flames. The smoke trail leads us down the old Jim Jim Rd, our first stretch of dirt track since leaving Darwin. Our destination is the Venture North campsite at Garig Gunak Barlu National Park...

Corporate credit risk prediction under stochastic volatility and jumps

This paper examines the impact of allowing for stochastic volatility and jumps (SVJ) in a structural model on corporate credit risk prediction. The results from a simulation study verify the better performance of the SVJ model compared with the commonly used Merton model, and three sources are provided to explain the superiority. The empirical analysis on two real samples further ascertains the importance of recognizing the stochastic volatility and jumps by showing that the SVJ model decreases bias in spread prediction from the Merton model, and better explains the time variation in actual CDS spreads. The improvements are found particularly apparent in small firms or when the market is turbulent such as the recent financial crisis.

Travel Journalism : Exploring Production, Impact and Culture

Travel journalism has experienced enormous growth over recent decades, with a record number of media organizations now involved in producing information for tourists in one way or another. Correspondingly, journalism and media scholars have begun to pay more attention to this phenomenon. This book gives a comprehensive overview of the burgeoning field of travel journalism studies. The contributors explore travel journalism in newspapers and magazines, on television and online, across a wide range of national and cultural contexts. Individual chapters provide critical discussions of theoretical approaches, present studies of production, content and impact, and explain how travel journalism can be understood through the lenses of postcolonialism, sustainability and cosmopolitanism. This fascinating account offers a thoroughly international and interdisciplinary perspective on an increasingly important field of journalism scholarship.

On the efficacy of key corporate governance recommendations in mid-tier companies : window-dressing or value-adding?

This paper examins the relationship between firm performance and key board and audit committee variables in a sample of mid-tier listed Australian firms. Unlike the UK where the corporate governance Code specifically outlines special arrangements for companies outside the FTSE 350 index, the ASX Corporate Governance recommendations make no special provisions for mid-tier companies. Consequently, mid-tier Australian companies may be expending scarce resources in conforming with recommendations that are not value-creating.

Institutional investors, risk/return and corporate governance : practical lessons from the Global Financial Crisis

The global grown in institutional investors means that firms can no longer ignore their influence in capital markets. However, not all institutional investors have the same motives to influence the firms they invest in. Institution investors' ability to influence management depends on the size of their investment and whether they have any business relations with the firm. Using a sample of Australian firms from 2006 to 2008, our empirical results show that the proportion of a company's shares held by institutional investors is positively associated with firm governance ratings, risk and profitability. This study shows that a positive association between risk and return is associated with large active institutional ownership, which we interpret as shareholders with sufficient power to pressure management to increase short-term profits.