An Analysis of the Association Between Firm Risk, Executive Share Options and Accounting Performance: Some Australian Evidence

This paper examines whether the financial performance of the firm is associated with the risk-taking propensity of executives, which is inferred from the structure of their share option portfolio. The objective of this paper is to determine if executives have greater risk bearing preferences when they have more share options than shares in their firm. In turn, executives' risk-taking preferences suggest that these decision-makers adopt value-increasing strategies. The results of this study support this notion. The results of the study of 182 Australian firms demonstrate that the negative relationship between firm risk and firm performance is weaker when executives hold a higher proportion of share options than shares in their investment in the firm. These results hold implications for executives' compensation contracts. That is, executives who share in their firms' risk via share options are more likely to undertake risky activities with high-expected performance outcome.

Case note - Roosters, ducks and labour hire arrangements : Damevski v Guidice (2003) 202 ALR 494 (FCA Full Court)

One of the features of the current Australian labour market is the growth in the number of businesses "contracting out" work that was previously performed by their employees. The "contracting out" is often done through labour hire arrangements: the business engages a labour hire agency to provide it with suitable labour on an "as needs" basis. A common scenario is that the labour hire agency contracts both with the workers who provide the services to the agency's client, and with the client to whom those services are provided. Often the agency pays the workers and bills its client for the labour costs, plus a service fee. Research indicates that during the first half of the 1990s, "the number of agency workers more or less doubled."1 Analysis of the latest data from the Australian Bureau of Statistics on the number of workers employed through labour hire arrangements has suggested: "290,100 employees were 'on-hired' through agencies in June 2002 and 162,000 workers were paid by labour hire firms in November 2001 (almost doubling from 84,300 some three years earlier)." The value of the employment services industry in 2001-02 was $10.2 billion. 2

The application of the psychological contract to workplace safety

Introduction: Psychological contracts of safety are conceptualized as the beliefs of individuals about reciprocal safety obligations inferred from implicit or explicit promises. Although the literature on psychological contracts is growing, the existence of psychological contracts in relation to safety has not been established. The research sought to identify psychological contracts in the conversations of employees about safety, by demonstrating reciprocity in relation to employer and employee safety obligations. The identified safety obligations were used to develop a measure of psychological contracts of safety. Method: The participants were 131 employees attending safety training sessions in retail and manufacturing organizations. Non-participant observation was used to collect the data during safety training sessions. Content analysis was used to analyze the data. Categories for coding were established through identification of language markers that demonstrated contingencies or other implied obligations. Results: Direct evidence of reciprocity between employer safety obligations and employee safety obligations was found in statements from the participants demonstrating psychological contracts. A comprehensive list of perceived employer and employee safety obligations was compiled and developed into a measure of psychological contracts of safety. A small sample of 33 safety personnel was used to validate the safety obligations. Conclusions and impact on industry: Implications of these findings for safety and psychological contract research are discussed.

Modelling and Administration of Contract-Based Systems

Mirroring the paper versions exchanged between businesses today, electronic contracts offer the possibility of dynamic, automatic creation and enforcement of restrictions and compulsions on agent behaviour that are designed to ensure business objectives are met. However, where there are many contracts within a particular application, it can be difficult to determine whether the system can reliably fulfil them all; computer-parsable electronic contracts may allow such verification to be automated. In this paper, we describe a conceptual framework and architecture specification in which normative business contracts can be electronically represented, verified, established, renewed, etc. In particular, we aim to allow systems containing multiple contracts to be checked for conflicts and violations of business objectives. We illustrate the framework and architecture with an aerospace example.

Towards a Monitoring Framework for Agent-Based Contract Systems

The behaviours of autonomous agents may deviate from those deemed to be for the good of the societal systems of which they are a part. Norms have therefore been proposed as a means to regulate agent behaviours in open and dynamic systems, and may be encoded in electronic contracts in order to specify the obliged, permitted and prohibited behaviours of agents that are signatories to such contracts. Enactment and management of electronic contracts thus enables the use of regulatory mechanisms to ensure that agent behaviours comply with the encoded norms. To facilitate such mechanisms requires monitoring in order to detect and explain violation of norms. In this paper we propose a framework for monitoring that is to be implemented and integrated into a suite of contract enactment and management tools. The framework adopts a non-intrusive approach to monitoring, whereby the states of a contract with respect to its contained norms can be inferred on the basis of messages exchanged. Specifically, the framework deploys agents that observe messages sent between contract signatories, where these messages correspond to agent behaviours and therefore indicate whether norms are, or are in danger of, being violated.

A contract-based system for aerospace aftercare

The logistics of the aerospace aftermarket raises a number of very interesting challenges from the perspective of electronic contracting. This is a highly dynamic domain, where contracts are established between airlines and engine manufacturers, as well as between engine manufacturers all the way down the supply lines, providing a particularly illustrative showcase for the technologies developed in the CONTRACT project. In this paper, we describe such a domain, as well as our modelling of it as a multiagent simulator where the CONTRACT framework has been used to monitor for compliance with norms.

Monitoring and Explanation of Contract Execution: A Case Study in the Aerospace Domain

In the domain of aerospace aftermarkets, which often has long supply chains that feed into the maintenance of aircraft, contracts are used to establish agreements between aircraft operators and maintenance suppliers. However, violations at the bottom of the supply chain (part suppliers) can easily cascade to the top (aircraft operators), making it difficult to determine the source of the violation, and seek to address it. In this context, we have developed a global monitoring architecture that ensures the detection of norm violations and generates explanations for the origin of violations. In this paper, we describe the implementation and deployment of a global monitor in the aerospace domain of [8] and show how it generates explanations for violations within the maintenance supply chain. We show how these explanations can be used not only to detect violations at runtime, but also to uncover potential problems in contracts before their deployment, thus improving them.

Predictors of job strain and intention to quit in a reorganised Australian workforce

This study examined the role of working conditions in predicting the psychological health, job satisfaction, organisational commitment and intention to quit of employees working in an industry sector that had undergone large-scale organisational change. The working conditions were assessed using an augmented job strain model- whereby job demand, job control and social support had been augmented by industry-specific stressors - and the psychological contract model. The results of regression analyses indicate that social support was predictive of all of the outcome measures. Job control and the honouring of psychological contracts were both predictive of job satisfaction and commitment, Furthermore, job satisfaction and organisational commitment were found to mediate the relationship between working conditions and intention to quit. Collectively, these findings suggest that strategies aimed at combating the negative effects of organisational change could be enhanced by addressing several variables represented in the models - particularly social support, job control and psychological contracts.

Employment relations : integrating industrial relations and human resource management

Incorporating Human Resource Management policies within the regulatory and institutional framework that governs contemporary industrial relations has always been problematic. This paper details the nature and causes of this problem, noting the different conceptual and practical understandings that underpin each form of labour management when being applied in organisational settings. It then looks at a range of industrial relations realities confronting managers when trying to apply HRM practices, and how these practices might be accommodated within the context of such realities as a means of improving organisational effectiveness. In so doing it delineates four approaches an organisation might take in its relations with trade unions when bargaining and concluding labour contracts, and which of these are consistent and inconsistent with the coexistence of HRM and industrial relations practices. It then looks at the issue of workplace change involving trade unions and collective bargaining in terms of three categorical models—the management-driven model, the trade union gatekeeper model, and the management-union alliance model, the intention again being to show which are consistent and inconsistent with the coexistence of these different forms of labour management. The paper concludes by drawing on these conceptual models to outline the issues and policies that need to be considered when applying HRM practices within an industrial relations setting.

Isn't sport taxing? The taxation of sports professionals post-Agassi

In Agassi v Robinson (Her Majestyʹs Inspector of Taxes), a majority of the House of Lords found that payments under two sponsorship contracts between a company owned and controlled by Mr Andre Agassi, (Agassi Enterprises Inc) and Nike Inc and Head Sport AG were assessable under UK tax law. This was so despite (i) none of the parties to the contracts was resident, nor domiciled, in the United Kingdom and (ii) none of the payer companies conducted business, directly or indirectly, through branches/agencies in the United Kingdom. The article considers whether the Australian Taxation Office could similarly assess non‐resident sports‐persons, like Mr Agassi, personally, and/or entities they control, on payments made under sponsorship agreements with a company such as Nike Inc. While the preferable view is that such payments are not sourced in Australia, Australian source rules are so ill defined that there is some basis for asserting such payments are sourced in Australia.

Sources of well-being and commitment of staff in the Australian Disability Employment Services

This study examined the role of working conditions in predicting the psychological health, job satisfaction and organisational commitment of personnel responsible for helping people with disabilities gain employment in the mainstream Australian labour market. The working conditions were assessed using two theories: the Job Strain Model (job demand, social support and job control) and Psychological Contract Theory (unwritten reciprocal obligations between employers and employees). In the case of the Job Strain Model, the generic dimensions had been augmented by industry-specific sources of stress. A cross-sectional survey was undertaken in June and July 2005 with 514 staff returning completed questionnaires (representing a response rate of 30%). Comparisons between respondents and non-respondents revealed that on the basis of age, gender and tenure, the sample was broadly representative of employees working in the Australian disability employment sector at that time. The results of regression analyses indicate that social support was predictive of all of the outcome measures. Job control and the honouring of psychological contracts were both predictive of job satisfaction and commitment, while the more situation-specific stressors - treatment and workload stressors - were inversely related to psychological health (i.e. as concern regarding the treatment and workload stressors increased, psychological health decreased). Collectively, these findings suggest that strategies aimed at combating the negative effects of large-scale organisational change could be enhanced by addressing several variables represented in the models - particularly social support, job control, psychological contracts and sector-specific stressors.

Development and implementation of agri-environmental policy: english experience and lessons for Australia

In this article we consider what Australia can learn from English experience with regard to the design, implementation and evaluation of Agri-Environmental Policy (AEP). First, we examine the emergence of the
need for farmers to meet Good Farming Practice standards to receive AEP payments. This concept closely relates to the 'duty of care' idea in Australia. Second, we explain how contracts have been used to implement AEP identifying important issues in design. Finally, we consider the importance of benefit and costs estimates of AEP implementation in determining policy developments. We conclude with a summary of results for AEP design and implementation in Australia.

Procurement of construction facilities: a case study of design management within a design and construct organisation

Presents a case study of design management within an Australian design-construct organization on a large residential apartment project, with the purpose of identifying and analysing issues associated with the organization, responsibilities and stages of development in a typical design-construct project. Discusses the nature of introspection in the Australian construction industry, the shift in procurement methods, the design and build approach, whole life issues, the need for a design manager, and the role of the facilities manager. Profiles the case study organization and its contracts and procurement methods, before focusing on weaknesses in the company, the role of the project design development manager in leading the design team, managing the design consultants, and interacting and advising the developer in relation to design decisions. Suggests from the exercise that: the project manager should remain the overall project leader, manager and interface between design, cost, programme, buildability, construction and user requirements; the design manager should be responsible for issuing all documentation; and the design cost manager should be responsible for verifying that the design developed accords with project budgets, project brief and quality requirements in conjunction with the design manager.

Insuring cleaner oceans: the economics of oil pollution prevention

The current system of controlling oil spills involves a complex relationship of international, federal and state law, which has not proven to be very effective. The multiple layers of regulation often leave shipowners unsure of the laws facing them. Furthemore, nations have had difficulty enforcing these legal requirements. This thesis deals with the role marine insurance can play within the existing system of legislation to provide a strong preventative influence that is simple and cost-effective to enforce. In principle, insurance has two ways of enforcing higher safety standards and limiting the risk of an accident occurring. The first is through the use of insurance premiums that are based on the level of care taken by the insured. This means that a person engaging in riskier behavior faces a higher insurance premium, because their actions increase the probability of an accident occurring. The second method, available to the insurer, is collectively known as cancellation provisions or underwriting clauses. These are clauses written into an insurance contract that invalidates the agreement when certain conditions are not met by the insured The problem has been that obtaining information about the behavior of an insured party requires monitoring and that incurs a cost to the insurer. The application of these principles proves to be a more complicated matter. The modern marine insurance industry is a complicated system of multiple contracts, through different insurers, that covers the many facets of oil transportation. Their business practices have resulted in policy packages that cross the neat bounds of individual, specific insurance coverage. This paper shows that insurance can improve safety standards in three general areas -crew training, hull and equipment construction and maintenance, and routing schemes and exclusionary zones. With crew, hull and equipment, underwriting clauses can be used to ensure that minimum standards are met by the insured. Premiums can then be structured to reflect the additional care taken by the insured above and beyond these minimum standards. Routing schemes are traffic flow systems applied to congested waterways, such as the entrance to New York harbor. Using natural obstacles or manmade dividers, ships are separated into two lanes of opposing traffic, similar to a road. Exclusionary zones are marine areas designated off limits to tanker traffic either because of a sensitive ecosystem or because local knowledge is required of the region to ensure safe navigation. Underwriting clauses can be used to nullify an insurance contract when a tanker is not in compliance with established exclusionary zones or routing schemes.