An analysis of the nature and effectiveness of corporate governance in smaller listed Australian companies

The objective of this thesis is to investigate the corporate governance attributes of smaller listed Australian firms. This study is motivated by evidence that these firms are associated with more regulatory concerns, the introduction of ASX Corporate Governance Recommendations in 2004, and a paucity of research to guide regulators and stakeholders of smaller firms. While there is an extensive body of literature examining the effectiveness of corporate governance, the literature principally focuses on larger companies, resulting in a deficiency in the understanding of the nature and effectiveness of corporate governance in smaller firms. Based on a review of agency theory literature, a theoretical model is developed that posits that agency costs are mitigated by internal governance mechanisms and transparency. The model includes external governance factors but in many smaller firms these factors are potentially absent, increasing the reliance on the internal governance mechanisms of the firm. Based on the model, the observed greater regulatory intervention in smaller companies may be due to sub-optimal internal governance practices. Accordingly, this study addresses four broad research questions (RQs). First, what is the extent and nature of the ASX Recommendations that have been adopted by smaller firms (RQ1)? Second, what firm characteristics explain differences in the recommendations adopted by smaller listed firms (RQ2), and third, what firm characteristics explain changes in the governance of smaller firms over time (RQ3)? Fourth, how effective are the corporate governance attributes of smaller firms (RQ4)? Six hypotheses are developed to address the RQs. The first two hypotheses explore the extent and nature of corporate governance, while the remaining hypotheses evaluate its effectiveness. A time-series, cross-sectional approach is used to evaluate the effectiveness of governance. Three models, based on individual governance attributes, an index of six items derived from the literature, and an index based on the full list of ASX Recommendations, are developed and tested using a sample of 298 smaller firms with annual observations over a five-year period (2002-2006) before and after the introduction of the ASX Recommendations in 2004. With respect to (RQ1) the results reveal that the overall adoption of the recommendations increased from 66 per cent in 2004 to 74 per cent in 2006. Interestingly, the adoption rate for recommendations regarding the structure of the board and formation of committees is significantly lower than the rates for other categories of recommendations. With respect to (RQ2) the results reveal that variations in rates of adoption are explained by key firm differences including, firm size, profitability, board size, audit quality, and ownership dispersion, while the results for (RQ3) were inconclusive. With respect to (RQ4), the results provide support for the association between better governance and superior accounting-based performance. In particular, the results highlight the importance of the independence of both the board and audit committee chairs, and of greater accounting-based expertise on the audit committee. In contrast, while there is little evidence that a majority independent board is associated with superior outcomes, there is evidence linking board independence with adverse audit opinion outcomes. These results suggest that board and chair independence are substitutes; in the presence of an independent chair a majority independent board may be an unnecessary and costly investment for smaller firms. The findings make several important contributions. First, the findings contribute to the literature by providing evidence on the extent, nature and effectiveness of governance in smaller firms. The findings also contribute to the policy debate regarding future development of Australia’s corporate governance code. The findings regarding board and chair independence, and audit committee characteristics, suggest that policy-makers could consider providing additional guidance for smaller companies. In general, the findings offer support for the “if not, why not?” approach of the ASX, rather than a prescriptive rules-based approach.

Crisis preparedness of construction companies

In high-risk industries, companies with well-conceived crisis management plans are at a commercial advantage. While there is some understanding of the risk management practices of construction companies, there is little insight into their crisis preparedness. This paper presents the findings of exploratory research that investigated this issue. Using a diagnostic model of crisis preparedness that has been developed and tested across a broad range of industries, it concludes that if the sample surveyed is typical, then corporate philosophies in construction companies do not support crisis management activities. Furthermore, crisis planning is rudimentary and undertaken in an insular, informal, fragmented fashion, supported by few resources and little strategic guidance. Consequently, many construction companies will have an inadequate understanding of their crisis exposure, of how to cope with crises when they happen, and of how to learn and recover from their aftermath.

The Fleet Store : pop up fashion retail gallery

The Fleet Store is a project that was created to research the impact of enterprise and authentic learning models, in increasing the viability and improved career potential of fashion business, design and creative industry (fashion major) students. Reflective Thinking techniques were employed to gain valuable insights into the quality of the experience, the networking and the motivational and experiential learning for all students. The lecturer acted as the Managing Director and curator of the entire event while maintaining pedagogy to support the experience. Research focussed on the ways in which student learning outcomes have been improved by creating product a professional and economically viable pop up fashion outlet in an inner city, high profile shopping precinct. The first QUT double degree fashion business students were supervised and guided to be responsible for creating and maintaining a profitable fashion outlet in collaboration with their lecturer Kay McMahon, Wintergarden Management, Brisbane Marketing, Creative Enterprise Australia and QUT Fashion. Reflective thinking and further research into career outcomes (that are acknowledged as being supported by the experience) are currently being undertaken.

Implementing a six sigma initiative in financial service companies

In a world of intense competition, Six Sigma is considered to be an important management philosophy, supporting organisations in their efforts to obtain satisfied customers. As financial service organisations have been slow to adopt Six Sigma, issues concerning its implementation are of major importance. For its implementation a large number of tools and techniques have been suggested by academics and practitioners. Intriguingly, despite the extensive effort that has been invested and benefits that can be obtained, the systematic implementation of Six Sigma in financial service organisations is limited. This paper presents a conceptual framework derived from literature and empirical results with a focus on financial services. Using this framework a financial service company should be able to cope with the relevant critical success factors. Thus, the framework allows identifying relevant aspects for a sustainable and successful implementation of a Six Sigma initiative.

Internationalisation of emerging market firms : an exploratory study of Chilean companies

Purpose This paper explores how firms from a Latin American market internationalise using the resource-based view (RBV) of the firm as a theoretical foundation. Specifically, it examines the internationalisation process of three Chilean companies that have become relevant international players. Design/methodology/approach Drawing on interviews with company managers, as well as industry data and corporate reports, this paper provides insights into the successful internationalisation process of emerging market firms. Findings The findings of this study suggest that specific capabilities and resources, such as belonging to a family conglomerate, domestic and foreign partnerships and networks, innovation and market orientation, and an experienced management team, are required for emerging market firms to internationalise and improve their performance in foreign markets. Originality/value This study is one of the few to address the internationalisation process of Chilean companies.

An analysis of the qualitative characteristics of management commentary reporting by New Zealand companies

The narrative section of annual reports has considerable value to its user groups, such as financial analysts and investors (Tiexiera, 2004; Barlett and Chandler, 1997, IASB, 2006). This narrative section including chairpersons’/presidents’ statement contains twice the quantity of information than the financial statements section (Smith and Taffler, 2000). However, the abundance of information does not necessarily enhance the quality of such information (IASB, 2006). This issue of qualitative characteristics has been long foregone by researchers. This issue has attracted the attention of IASB (2006). Following the dearth in research in regard to qualitative characteristics of reporting this paper explores whether investors’ required qualitative characteristics as outlined by the IASB (2006) have been satisfied in management commentary section of New Zealand companies’ annual reports. Our result suggests that the principal stakeholders’, that is, investors’ qualitative characteristics requirements have been partially met in this section of annual reports. The qualitative characteristic of ‘relevance’ and ‘supportability’ have been satisfied in more annual reports compared to that of ‘balance’ and ‘comparability.’

The Profiling of Property, Plant & Equipment (PPE) Contributions in Australia and Malaysia Public Listed Construction Companies

The purpose of this paper is to study the profiling of property, plant and equipment (PPE) contributions in Australia and Malaysia construction companies. A company’s worth is usually based on the listed share price on the stock exchange. In arriving at the net profit, the contribution of PPE in the company’s assets is somehow being neglected. This paper will investigate the followings; firstly the level of PPE contribution in the construction firms by comparing the PPE contributions to the company’s asset as a whole which includes fixed (non-current) assets and current assets. This will determine the true strength of the companies, rather than relying on the share prices alone. Secondly, the paper will determine the trend of company’s asset ownership to show the company’s performance of the PPE ownership during the period of study. The data is based on the selected construction companies listed on the Australian Stock Exchange (ASX) and Malaysian Stock Exchange, known as Bursa Malaysia. The profiling will help to determine the strength of the construction firms based on the PPE holding, and the level of PPE ownerships in the two countries construction firms during the period of study.

Comparing retail union strategy in a neoliberal context : the case of Australia and New Zealand

Retail employees are amongst the most vulnerable workers in the context of neoliberal market economies. In many countries, low paid retail employees comprise around 10 per cent of the workforce (ABS 2011). The retail labour market is typically highly feminised and youthful, with many employees in part time and various forms of precarious employment (Tailby & Pollert 2011). However, the industry and its trade unions have rarely been the focus of academic study (Tilly & Carré 2011). This paper thus aims to analyse and compare trade union strategies in the retail industry in Australia and New Zealand, by utilising findings from a larger comparative study. The respective unions studied are the Shop Distributive and Allied Workers Union (SDA) in Australia and the National Distribution Union (NDU) in New Zealand. Data from interviews with union officials at different levels and from different regional locations in Australia and NZ are analysed. Union policy documents are also utilised to support the empirical data. Key findings from the comparison of retail unions’ strategy in Australia and NZ include: 1) the importance of institutional factors and internal political differences in shaping and constraining union strategies; 2) different emphases on external relationships and variations in partnership approaches; 3) the need to recruit to ‘stand still’ by retail unions in both countries; and, 4) similarities and differences in the unions’ organising approaches. The paper concludes by examining the implications of these findings for retail unions’ strategic choices and their ability to deliver workplace justice for employees.

Productivity performance of Singapore’s retail sector : a two-stage non-parametric approach

This paper seeks to identify and quantify sources of the lagging productivity in Singapore’s retail sector as reported in the Economic Strategies Committee 2010 report. A two-stage analysis is adopted. In the first stage, the Malmquist productivity index is employed which provides measures of productivity change, technological change and efficiency change. In the second stage, technical efficiency estimates are regressed against explanatory variables based on a truncated regression model. Sources of technical efficiency were attributed to quality of workers while product assortment and competition negatively impacted on efficiency.

The perceived importance of mall retail categories and its effect on likelihood of purchase during a recession

Recessions impact the retail sector and as such research into consumer decision making during such times is imperative. In response to this, our study takes an innovative approach to examining how the perceived importance of retail store categories in a shopping mall influences the relationship between consumers' shopping attitudes and likelihood of purchasing in those categories during a recession. The overall findings show the importance of a product category to a consumer, which is often overlooked, has a strong explanatory influence on consumer purchase intentions for that specific retail store categories in a shopping mall under recession conditions. Findings also show that for consumers’ who have altered their shopping behaviour the perceived importance of a retail store category fully mediates the relationship for: Majors, Leisure, Food Catered and Mini Majors categories, and partial mediation for Apparel. Importance has no mediating effect for: Food Retail, General Retail, Mobile Phone Services, Home wares, and Retail Services. Our study makes a key contribution to the retail management literature with the findings suggesting that redefining and articulating the importance of the value offering for specific retail store categories can help reduce the impact of changes in consumers' recessionary shopping intentions across the mall tenant mix. Such actions can then help preserve the image of the shopping mall in the minds of the consumers when the economic recovery begins.

Service convenience and social servicescape : retail vs hedonic setting

Purpose – While there have been numerous studies on the antecedents and consequences of service quality, there has been little investigation of the moderators of service quality. The purpose of this study is to demonstrate the effects of two moderators: service convenience and the social servicescape. The moderating effects are tested in two service settings: retail and hedonic (concert). Design/methodology/approach – A survey of 270 customers at kitchen display showrooms and 320 concert-goers was undertaken. The results were analysed using regression analysis. Findings – The results show support for ten of the 12 hypotheses. Service convenience moderated the relationships between perceived service quality and its three sub-dimensions (interaction, environment, and outcome quality), differently in different settings (retail vs hedonic). This supports the authors' general argument that the outcome dimension tends to be more important to customers in a retail setting, while interaction and environment quality dimensions tend to be more important in hedonic service consumption. Practical implications – These findings suggest that managers need to use different service management tactics in retail and hedonic service settings. Specifically managers in retail settings need to pay more attention to service convenience to achieve service quality and managers in hedonic settings should concentrate on the social servicescape. Originality/value – This paper is the first to test the moderating factors of service convenience and social servicescape on service quality.

Comparing retail union strategy in a neoliberal context

Amongst the most vulnerable workers in a neoliberal world are retail employees. In many countries these low paid workers comprise around 10 per cent of the workforce. The retail labour market is highly feminised, in some countries quite youthful and often part time or in various forms of precarious employment. The industry and its unions have however rarely been studied by academics. A three-country research team (United Kingdom, Australia and New Zealand) is investigating retail union strategy across these Anglophone countries in order to determine how, and how effectively, unions are contributing to workplace justice for retail workers.