A partnership model of corporate ethics

The stock market crash of 1987 had a profound effect on corporate Australia and the Australian community in general. The fall-out revealed that some of our most respected business figures had not been as ethical, or even as lawful, as we would have hoped. This impropriety produced in Australia an awakening to business ethics. Whilst many companies endeavoured to introduce ethical practices into their corporations, they perceived ethics as a way of minimising damage to the corporation and in some cases as a means of competitive advantage. What was lost was the reason that one should embark on business ethics; and that is to make the society and corporate Australia a more ethical place in which to exist.This paper proposes a model based on 2 factors: commitment and partnerships, as a means of enabling corporate Australia to refocus attention on the main purpose of being inherently ethical in all that we do. This ethical model requires a commitment to partnerships with all stakeholders both internal and external in an attempt to enhance the level of ethical business practices that are contemplated and pursued within corporate Australia. Whilst the research agenda and the information collected is Australian-based, it is hoped that the ideas contained within this paper will have a wider appeal to corporations in similar cultural settings.

Environmental factors and product adaptation in Middle Eastern markets : the experience of Australian companies

This paper examines the impact that environmental factors have on the decision of Australian companies to adapt products for Middle Eastern markets. It  concludes that of all product aspects, labeling requires the greatest amount of adaptation and that socio-cultural factors have the greatest influence on overall product adaptation. Furthermore, environmental factors impact on product   adaptation in different ways, reflected in the adaptation of different aspects of the overall product.

Information disclosure and corporate governance in listed companies in China: from Yinguangxia to Enron

China's path to the development of a modern securities market has not been a smooth one. This article argues that efforts to impose Western securities market models on China have been fraught with difficulty. This is especially clear from the adoption of information disclosure principles and practices. While the integrity of disclosure practices is a fundamental element in maintaining investors' confidence in securities markets, disclosure practices need to be attuned to China '5 systemic features, especially in regard to its legal structure and rules. Market failures, such as the collapse of Enron in the United States, have led to a realisation that US disclosure models have their own difficulties and that these should not be uncritically used. This article reviews recent Chinese law andpractice (using the Yinguangxia false disclosure scandal as an example) in this area and calls for the adoption of a more critical approach towards the use of Western models with particular regard to China's own distinctive pathways of reform.

Towards manadatory shareholder committees in Australian companies

A common objective in recent Australian and international corporate governance reform programs is the enhancement of shareholder participation. Active shareholder involvement brings account- ability to the board and management, and is appropriate considering that shareholders are the ultimate owners of the company. Curiously, however, while shareholder participation and representation has become a priority in the contemporary corporate governance arena, the bulk of recent governance reform initiatives operate on the assumption that there is a clear separation of the board and management from the general body of shareholders, and that this is necessary to achieve optimal performance. The requirement that directors be 'independent' of the company and its shareholders is a prime example. In this article, the authors propose the establishment of a mandatory shareholder committee in Australian companies as a way of enhancing shareholder participation and representation.]

Price exhaustion and number preference : time and price confluence in Australian stock prices

Confluence occurs when different trading filters generate signals that point to the same directional move. Using regression analysis, this paper investigates confluence trading signals associated with number preference and price exhaustion, for a sample of Australian stocks. The results show that certain price levels tend to act as psychological barriers, and that price exhaustion signals are a real phenomenon in the Australian stock market. It is shown also that confluence exists in the Australian stock market. Importantly, confluence is associated with price retracements that are of economic and statistical significance, offering profitable trading opportunities. The results suggest that Australian stocks do not follow a random walk.

On the extent of speculative activity in the Indian stock market during badla and post-badla period

The authors test the existence of speculative activity in the Indian stock market during badla and post-badla period. They further investigate whether speculative activity migrated to single stocks futures market after banning of badla system. In both the tests it is found that there is no evidence of strong speculative activity in the Indian market. The research raises some questions on the regulators decision of banning badla system and sheds some light on the future decisions with respect to single stock futures market.

Corporate financial disclosure practices in Asian and Middle Eastern countries

This paper investigates the financial disclosure practices of corporate annual reports published in Asian countries including Bangladesh, Indonesian, Malaysia and the Middle East countries including Bahrain, Iran, Jordan, Kuwait, Oman, Pakistan, Qatar, Saudi Arabia and Turkey. The purpose of the study is to measure the financial disclosure diversity in these countries, with a view to developing a classification of their similarities and differences in respect to their compliance with International Accounting Standards (IAS). Annual reports of 126 public companies liisted on the countries' stock exchanges are the central data source, supplemented with other relevant information about financial disclosure practices in each country. A disclosure checklist adopted from all IASs and summarised in 306 individual items of financial disclosures is used as a means of extending an understanding of financial reporting in these countries. Results show the relative degree of conformity with IASs for each of the countries included in this study. 

Strategic Australian biotechnology opportunities

Discusses the biotechnology opportunities in Australia as of April 2005. Specific core activities of Australian biotechnology companies; Number of biotechnology companies listed on the Australian Stock Exchange on September 30, 2004; Mutual recognition arrangements that exist with Australia and key international regulatory authorities.

Removal of directors of public companies takes centre stage in Australia : an exploration of the corporate law and governance issues

Increasing attention is being given to the legal and governance issues relating to the removal of directors in Australian public companies. This has been due mainly to the difficulties experienced by the board of National Australia Bank in attempting to remove one of its fellow directors, and the subsequent development of public companies entering into so-called 'prenuptial agreements' with new directors, requiring that the director 'resign' if the board pass a vote of no-confidence in the director. In this article, the author revisits the area of director removal in Australian public companies for two reasons. The first reason, which covers the majority of the article, is to engage in a detailed analysis of whether the pre-nuptial agreements which some public companies have indicated that they support using to remove directors, are in fact enforceable under Australia's Corporations Act The second reason is to outline a law reform proposal to enable public companies to remove directors without requiring the vote of shareholders at a general meeting. The proposal involves providing Australia' corporate  regulator, the Australian Securities and Investments Commission (ASIC) with the power to grant relief from the statutory removal provisions to public companies, but in a way which balances the competing objectives of commercial efficiency and shareholder participation and, very importantly, encourages good corporate governance practices by companies in relation to the performance assessment  of directors.

It is in the interests of both shareholders and directors to agree on a set of ground rules for the effective supervision of companies that reconciles the rights of the owners to overall control with the much tougher demands on modern directors

Simultaneous volatility transmissions and spillover effects: U.S. and Hong Kong stock and futures markets

Contemporaneous transmission effects across volatilities of the Hong Kong Stock and Index futures markets and futures volume of trade are tested by employing a structural systems approach. Competing measures of volatility spillover, constructed from the overnight U.S. S&P500 index futures, are tested and found to impact on the Hong Kong asset return volatility and volume of trade patterns. The examples utilize intra-day 15-min sampled data from this medium-sized Asia Pacific equity and derivative exchange. Both the intra- and inter-day patterns in the Hong Kong market are allowed for in the estimation process.

Environmental management system auditing within Australasian companies

Reviews the literature on environmental management auditing, and surveys 132 ISO 14001 certified organizations in Australia and in New Zealand. Identifies the main reason for internal environmental audit, and the most frequent actions that result from the audit process, such as formation of a preventive plan. Looks at review procedures by top management, and the frequency of audit. Reveals the length of time an audit takes and the method of documentation adopted, by different industries. Notes six major findings and recommends sharing the findings of audits with employees and  suppliers so that improvements can be identified and implemented.

Can the use of foreign currency derivatives explain variations in foreign exchange exposure? Evidence from Australian companies

We investigate the role of foreign currency derivatives (FCD) in alleviating foreign exchange rate exposure of Australian firms. While there is some evidence that the use of FCD reduces the level of ex-post short-term exposure, such an effect is absent with regard to the degree of foreign operations. Our results support the view that FCDs are used to hedge existing exchange rate exposures and that Australian firms, generally, are extensively exposed to currency fluctuations in the long run. While monthly exposure appears to be a function of a firm's size and financial hedging, exchange rate exposure of shorter horizons (1 and 3 months) appears to be negatively related to a firm's price earnings ratio (proxying growth opportunities)—thereby supporting the ‘underinvestment’ hypothesis. Further, the exposure of longer horizons (12 and 24 months) is positively related to a firm's liquidity, supporting the view that liquidity is a substitute for hedging.

On the determinants of derivative usage by Australian companies

This paper provides an examination of the determinants of derivative use by Australian corporations. We analysed the characteristics of a sample of 469 firm/year observations drawn from the largest Australian publicly listed companies in 1999 and 2000 to address two issues: the decision to use financial derivatives and the extent to which they are used. Logit analysis suggests that a firm's leverage (distress proxy), size (financial distress and setup costs) and liquidity (financial constraints proxy) are important factors associated with the decision to use derivatives. These findings support the financial distress hypothesis while the evidence on the underinvestment hypothesis is mixed. Additionally, setup costs appear to be important, as larger firms are more likely to use derivatives. Tobit results, on the other hand, show that once the decision to use derivatives has been made, a firm uses more derivatives as its leverage increases and as it pays out more dividends (hedging substitute proxy). The overall results indicate that Australian companies use derivatives with a view to enhancing the firms' value rather than to maximizing managerial wealth. In particular, corporations' derivative policies are mostly concerned with reducing the expected cost of financial distress and managing cash flows. Our inability to identify managerial influences behind the derivative decision suggests a competitive Australian managerial labor market.