Takeovers: Acceptance facilities revisited in the Patrick case

Takeovers undertaken in Australia are highly regulated transactions. Once shareholders in the target accept an offer they have a limited opportunity, if any at all, to reconsider or revoke their acceptance in the light of new circumstances. Arguably, this explains target shareholders reluctance to accept an offer made for their shares under a takeover. The problem of shareholder inertia in takeovers has been identified by bidders, who have sought to induce bid acceptance through the use of innovative mechanisms. The efficacy of the Acceptance Facility mechanism was recently revisited in the Panel decision in Patrick Corporation Ltd’s takeover by Toll Holdings Ltd.

Board gender diversity in UK firms – recent trends and performance eEffects

This paper provides an overview of the position of women directors in UK firms. Based on data for all UK firms with more than three directors, this data provides a comprehensive picture of the position of women in UK business leadership and contributes to our understanding of progress towards achieving greater gender balance in the boardroom. Five key points emerge. •Female directors account for around 1:4 directors in UK firms but only around 1:10 businesses in the UK are female controlled. •Only 1:226 larger firms in this category have a majority of female directors. •The overall proportion of female directors in the UK has grown in recent years but slowly. At the rate of progress achieved over the 2003-2005 period, it will be the year 2225 before gender balance in company directorships is achieved in the UK. •There are a significant and interesting group of 12, 600 sisterhood companies in the UK – those wholly owned and led by women. Although they are predominantly services, these do firms exist in all business sectors with a focus on smaller companies. These firms represent an interesting potential focus for future research. •Our analysis of board gender diversity and business growth suggests that there is a business cost to gender balance in terms of foregone growth.

Board composition, ownership structure and dividend policies in an emerging market: further evidence from CASE 50

Purpose – The purpose of this study is to examine dividend policies in an emerging capital market, in a country undergoing a transitional period. Design/methodology/approach – Using pooled cross-sectional observations from the top 50 listed Egyptian firms between 2003 and 2005, this study examines the effect of board of directors’ composition and ownership structure on dividend policies in Egypt. Findings – It is found that there is a significant positive association between institutional ownership and firm performance, and both dividend decision and payout ratio. The results confirm that firms with a higher return on equity and a higher institutional ownership distribute higher levels of dividend. No significant association was found between board composition and dividend decisions or ratios. Originality/value – This study provides additional evidence of the applicability of the signalling model in the emerging market of Egypt. It was found that despite the high institutional ownership and the closely held nature of the firms, which imply lower agency costs, the payment of higher dividend was considered necessary to attract capital during this transitional period.

The impact of board independence and ownership structure on the timeliness of corporate internet reporting of Irish-listed companies

Purpose – This study seeks to provide valuable new insight into the timeliness of corporate internet reporting (TCIR) by a sample of Irish-listed companies. Design/methodology/approach – The authors apply an updated version of Abdelsalam et al. TCIR index to assess the timeliness of corporate internet reporting. The index encompasses 13 criteria that are used to measure the TCIR for a sample of Irish-listed companies. In addition, the authors assess the timeliness of posting companies’ annual and interim reports to their web sites. Furthermore, the study examines the influence of board independence and ownership structure on the TCIR behaviour. Board composition is measured by the percentage of independent directors, chairman’s dual role and average tenure of directors. Ownership structure is represented by managerial ownership and blockholder ownership. Findings – It is found that Irish-listed companies, on average, satisfy only 46 per cent of the timeliness criteria assessed by the timeliness index. After controlling for size, audit fees and firm performance, evidence that TCIR is positively associated with board of director’s independence and chief executive officer (CEO) ownership is provided. Furthermore, it is found that large companies are faster in posting their annual reports to their web sites. The findings suggest that board composition and ownership structure influence a firm’s TCIR behaviour, presumably in response to the information asymmetry between management and investors and the resulting agency costs. Practical implications – The findings highlight the need for improvement in TCIR by Irish-listed companies in many areas, especially in regard to the regular updates of information provided on their web sites. Originality/value – This study represents one of the first comprehensive examinations of the important dimension of the TCIR in Irish-listed companies.

Corporate governance and the timeliness of corporate internet reporting by U.K. listed companies

This study is an examination of the timeliness of corporate internet reporting by U.K. companies listed on the London Stock Exchange (LSE). The research examines the significance of several corporate governance and firm-specific characteristics as potential determinants of the timeliness of corporate internet reporting. Our primary analysis provides evidence of a significant association between timely corporate internet reporting and the corporate governance characteristics of board experience and board independence. Our findings provide evidence that boards with less cross directorships, more experience in terms of the average age of directors, and lower length in service for executive directors provide more timely corporate internet reporting.We find that board independence is negatively associated with timely corporate internet reporting. Follow-up analysis provides additional evidence of a significant association between the timeliness of corporate internet reporting and board experience. The evidence indicates that role duality and block ownership are associated with less timely corporate internet reporting. Our findings also reveal strengths and weaknesses in the Internet reporting of U.K. listed companies. Companies need to voluntarily focus on improving the timeliness dimension of their corporate internet reporting so that the EU and U.K. accounting regulators do not replace recommendations with regulations.

Auditor's engagement risk and audit fees:the role of the audit firm alumni

This study explores the effect of the association of audit firm alumni with their alma mater on audit prices. The tests indicate that there is a moderate reduction of up to 21% in the level of audit fee when alumni (i.e., former employees) of the incumbent audit firm sit on the client board of directors which is consistent with the engagement risk theory. This suggests that there is an 'alumni effect' in the market for audit services. The findings hold only in the large company segment of the market. The results are robust to different model specifications and alternative samples. The sample comprises all executive and non-executive directors who run the UK quoted companies and are simultaneously ICAEW qualified chartered accountants. The study's implications for the accounting profession and the regulators are also discussed. © 2007 The Author Journal compilation © 2007 Blackwell Publishing Ltd.

Differential gains from Business Link support and advice:a treatment effects approach

The provision of advisory support to small firms is almost ubiquitous in OECD countries, although it is organised in different ways and is justified on slightly different grounds. In England publicly supported advisory services are provided through the Business Link (BL) network. Here, we consider two questions: what sort of companies receive advisory support from BL; and, what types of firms benefit most from that support? Our analysis is based on a telephone survey of 2000 firms, around half of which had received intensive assistance from BL between April and October 2003. Probit analysis suggests that the probability of receiving assistance was greater among younger businesses, those with larger numbers of directors in the firm, and those with more gender diversity among the firm's leadership team. Our business-growth models suggest that BL intensive assistance was having a positive effect on employment growth in 2003. BL had a positive but insignificant impact on sales growth over the period. Employment growth effects tend to be larger where firms have a management and organisational structure, which is more conducive to absorbing and making use of external advice. The analysis suggests that BL might increase its impact through targeting these larger, more export-orientated, businesses. Employment growth effects differ little, however, depending on either the ethnic or the gender diversity of the leadership team.

The disclosure of directors' share option information in UK companies

This paper considers the empirical determinants of the quality of information disclosed about directors’ share options in a sample of large companies in 1994 and 1995. Policy recommendations, consolidated in the recommendations of the Greenbury report, argue for full and complete disclosure of director option information. In this paper two modest contributions to the UK empirical literature are made. First, the current degree of option information disclosure in the FTSE 350 companies is documented. Second, option information disclosure as a function of variables that are thought to in¯uence corporate costs of disclosure is modelled. The results have implications for corporate governance. Speci®cally, support is oVered for the monitoring function of nonexecutive directors. In addition, nondisclosure is found to be related to variables which proxy proprietary costs of revealing information (such as company size).

Corporate boards and incentives: empirical evidence from the UK in 1935

We investigate boardroom governance using UK historical data for 1935. We demonstrate that there is a negative relationship between risk and incentives in this year. Prior research has produced anomalous results (Prendergast, 2002). Second, we show that average (median) board ownership of ordinary shares is about 7.95% (2.88%). Heuristically this figure is less than previously reported estimates for the US also using 1935 data. Finally, we show the phenomenon of multiple board membership. UK directors in 1935 hold many directorships – sometimes exceeding 10 concurrent memberships.