Optimal monitoring in family-owned companies? Evidence from Asia

Manuscript Type: Empirical Research Issue: We propose that high levels of monitoring are not always in the best interests of minority shareholders. In family-owned companies the optimal level of board monitoring required by minority shareholders is expected to be lower than that of other companies. This is because the relative benefits and costs of monitoring are different in family-owned companies. Research Findings: At moderate levels of board monitoring, we find concave relationships between board monitoring variables and firm performance for family-owned companies but not for other companies. The optimal level of board monitoring for our sample of Asian family-owned companies equates to board independence of 38%, separation of the Chairman and CEO positions and establishment of audit and remuneration committees. Additional testing shows that the optimal level of board monitoring is sensitive to the magnitude of the agency conflict between the family group and minority shareholders and the presence of substitute monitoring. Practitioner/Policy Implications: For policymakers, the results show that more monitoring is not always in the best interests of minority shareholders. Therefore, it may be inappropriate for regulators to advise all companies to follow the same set of corporate governance guidelines. However, our results also indicate that the board governance practices of family-owned companies are still well below the identified optimal levels. Keywords: Corporate Governance, Board Independence, Board of Directors, Family Firms, Monitoring.

Submission to Travelsafe : vehicle impoundment for drink drivers

This submission has been prepared in response to the Parliamentary Travelsafe Committee's Inquiry into vehicle impoundment for drink drivers to address research relevant to the committee’s investigation into whether: • Drink drivers in Queensland continue to drive illegally after being apprehended by police or disqualified from driving by the courts; • The incidence of repeat drink driving undermines the effectiveness of existing penalties for drink driving offences; and • Vehicle impoundment and/or ignition key confiscation are cost-effective deterrents that will reduce drink driving recidivism, relating to other existing or potential methods of managing offenders.

Soft-biometrics : unconstrained authentication in a surveillance environment

Soft biometrics are characteristics that can be used to describe, but not uniquely identify an individual. These include traits such as height, weight, gender, hair, skin and clothing colour. Unlike traditional biometrics (i.e. face, voice) which require cooperation from the subject, soft biometrics can be acquired by surveillance cameras at range without any user cooperation. Whilst these traits cannot provide robust authentication, they can be used to provide coarse authentication or identification at long range, locate a subject who has been previously seen or who matches a description, as well as aid in object tracking. In this paper we propose three part (head, torso, legs) height and colour soft biometric models, and demonstrate their verification performance on a subset of the PETS 2006 database. We show that these models, whilst not as accurate as traditional biometrics, can still achieve acceptable rates of accuracy in situations where traditional biometrics cannot be applied.

New strength : independent television companies in China’s television industry

As most of people know that all of mass media are state-owned in China, television stations are not exceptional to belong to the enormous state-owned system. But to date, with the economic reform in the broadcasting system and China entering into WTO, the television industry has increased greatly and the television market has matured with more and more competition. The players in China’s television industry have changed from the monologue of TV stations to multi roles of TV stations, production companies and overseas television companies, although TV stations are still the majority of China’s TV market. Especially, private television production companies are becoming more and more active in this market. In this paper, I will describe the development process and challenges of this group in China and ask whether the emergence of this group means for the whole China’s TV industry?

Private television production companies in China : new strength in the market

As most people know, all mass media, including television stations, are state-owned in China. However, with the economic reform in the broadcasting system and China entering the World Trade Organization (WTO), the television industry has expanded greatly and the television market has evolved, with an ensuing growth of competition. The players in China’s television industry have changed from a monologue of TV stations to stations that hold multiple roles and a growth of production companies and overseas television companies although the TV stations still dominate China’s television market. Private television production companies are, however, becoming increasingly active in this market.

Are East Asian companies benefiting from western board practices?

Since the Asian crisis, East Asian nations have strived to introduce corporate governance codes, directing companies how to best improve their corporate governance practices. However, these codes have not been universally accepted by East Asian companies. This study examines the adoption of major board-related corporate governance recommendations by large nonfinancial companies in seven East Asian nations and investigates whether improvements in these board governance mechanisms have been associated with increased operating performance and market value. The results indicate that family-owned companies started with worse board governance and have been least likely to improve their board governance since the crisis. Overall, bigger, faster growing, non-family-owned companies with less concentrated ownership have been more likely to improve their board governance. Splitting of the positions of Chairman and CEO, creation of audit and nomination committees and improvements in overall board governance were found to have a positive relationship with subsequent operating performance and/or market value.

Do board contacts matter? : an analysis of the relationship between boards of directors’ ties and the performance of Australia’s largest companies.

Boards of directors are thought to provide access to a wealth of knowledge and resources for the companies they serve, and are considered important to corporate governance. Under the Resource Based View (RBV) of the firm (Wernerfelt, 1984) boards are viewed as a strategic resource available to firms. As a consequence there has been a significant research effort aimed at establishing a link between board attributes and company performance. In this thesis I explore and extend the study of interlocking directorships (Mizruchi, 1996; Scott 1991a) by examining the links between directors’ opportunity networks and firm performance. Specifically, I use resource dependence theory (Pfeffer & Salancik, 1978) and social capital theory (Burt, 1980b; Coleman, 1988) as the basis for a new measure of a board’s opportunity network. I contend that both directors’ formal company ties and their social ties determine a director’s opportunity network through which they are able to access and mobilise resources for their firms. This approach is based on recent studies that suggest the measurement of interlocks at the director level, rather than at the firm level, may be a more reliable indicator of this phenomenon. This research uses publicly available data drawn from Australia’s top-105 listed companies and their directors in 1999. I employ Social Network Analysis (SNA) (Scott, 1991b) using the UCINET software to analyse the individual director’s formal and social networks. SNA is used to measure a the number of ties a director has to other directors in the top-105 company director network at both one and two degrees of separation, that is, direct ties and indirect (or ‘friend of a friend’) ties. These individual measures of director connectedness are aggregated to produce a board-level network metric for comparison with measures of a firm’s performance using multiple regression analysis. Performance is measured with accounting-based and market-based measures. Findings indicate that better-connected boards are associated with higher market-based company performance (measured by Tobin’s q). However, weaker and mostly unreliable associations were found for accounting-based performance measure ROA. Furthermore, formal (or corporate) network ties are a stronger predictor of market performance than total network ties (comprising social and corporate ties). Similarly, strong ties (connectedness at degree-1) are better predictors of performance than weak ties (connectedness at degree-2). My research makes four contributions to the literature on director interlocks. First, it extends a new way of measuring a board’s opportunity network based on the director rather than the company as the unit of interlock. Second, it establishes evidence of a relationship between market-based measures of firm performance and the connectedness of that firm’s board. Third, it establishes that director’s formal corporate ties matter more to market-based firm performance than their social ties. Fourth, it establishes that director’s strong direct ties are more important to market-based performance than weak ties. The thesis concludes with implications for research and practice, including a more speculative interpretation of these results. In particular, I raise the possibility of reverse causality – that is networked directors seek to join high-performing companies. Thus, the relationship may be a result of symbolic action by companies seeking to increase the legitimacy of their firms rather than a reflection of the social capital available to the companies. This is an important consideration worthy of future investigation.

Eat, drink and be civil

Brisbane is provincial city that has been developing rapidly since the early 1990s. The growth and development of its public and semi-public spaces means there are many more ways to engage with the city than was previously possible. --------- I suggest the city’s new and transformed spaces have enabled 2 important developments 1) a growth in forms of sociability and encounters with difference and 2) the negotiation of civic competencies. --------- The paper draws upon research conducted during a PhD project which used multi-method approaches - including qualitative [interviews] and quantitative data [surveys], psychoanalytic theory and text analysis.The study also made connections between the real city and the discursive city to argue that urban experience is constituted both materially and imaginatively.

The 2006 CSRC guidelines for articles of Association of Chinese listed companies : critiquing from an Australian perspective

Compares the Chinese Securities and Regulatory Commission's guidelines for articles of association of listed companies issued in 2006 with 'replaceable' rules in the Australian Corporations Act 2001. Discusses the provisions of the Chinese guidelines and the Australian rules on corporate constitution, interpretation, a company's representative, object clauses, shareholders' powers and meetings and directors. Questions whether the Chinese guidelines facilitate effective corporate governance.

In search of good governance for Asian family listed companies : a case study on Hong Kong

Discusses the importation of Western concepts of corporate governance into Hong Kong where many companies are family companies to which Asian culture is more familiar. Considers different models of corporate governance and questions the application of Western structures to family owned companies. Examines the weaknesses inherent in the typical structure of Asian companies, particularly from the point of view of minority shareholders. Suggests that a system of governance based on Confucian philosophy may be more effective in Hong Kong.

Sustainable airport infrastructure : balancing infrastructures for the airport metropolis

Ongoing financial, environmental and political adjustments have shifted the role of large international airports. Many airports are expanding from a narrow concentration on operating as transportation centres to becoming economic hubs. By working together, airports and other industry sectors can contribute to and facilitate not only economic prosperity, but create social advantage for local and regional areas in new ways. This transformation of the function and orientation of airports has been termed the aerotropolis or airport metropolis, where the airport is recognised as an economic centre with land uses that link local and global markets. This chapter contends that the conversion of an airport into a sustainable airport metropolis requires more than just industry clustering and the existence of hard physical infrastructure. Attention must also be directed to the creation and on-going development of social infrastructure within proximate areas and the maximisation of connectivity flows within and between infrastructure elements. It concludes that the establishment of an interactive and interdependent infrastructure trilogy of hard, soft and social infrastructures provides the necessary balance to the airport metropolis to ensure sustainable development. This chapter provides the start of an operating framework to integrate and harness the infrastructure trilogy to enable the achievement of optimal and sustainable social and economic advantage from airport cities.

The soft skills of project management : a view from diploma graduates

A research study was conducted in a key area of project management: stakeholder and relationship management through communication - ‘the soft skills’. It was conducted with Diploma of Project Management graduates from one Australian Registered Training Organisation (RTO), the Australian College of Project Management (ACPM). The study was designed to initially identify the qualifications and project management experience of the participants. Further, it identified the respondents’ understanding of and attitude to commonly held principles and literature within the project management field as it relates to the soft skills of projects. This is specifically connected to their project experience and knowledge, approach to project communications, and the stakeholder’s needs. Some of the literature showed that through the management and application of the project soft skills by project managers may actually be a recipe for project success. Hence, an important underpinning of this study was that the project manager can enhance project success (or reduce the impact of failure) by identifying and prioritising stakeholders, developing and implementing strategies for engaging and communicating with them. The use of a positivist approach to this research study allowed for the evaluation and understanding of respondents to the emergent theories of successful projects being delivered through the management of stakeholders, communications, and relationships. Consequently, a quantitative approach to this study was undertaken. The participants were drawn from graduates who completed (graduated) from the ACPM with the Diploma of Project Management between January 2004 and December 2007 only. A list of graduates was collated from this period indicating that a total of 656 graduates have completed and graduated with the qualification. The data collection for this study was done in one phase only. The questionnaire was emailed individually by the researcher directly to the selected potential respondents. Subsequently, a total of 44 responses were received, providing an overall response rate of 43%. Two key factors emerged from the survey questionnaire. Firstly, the need for the soft skills to be incorporated in project management curriculum and education programs, and secondly, that successful projects are delivered through the management and application of the project soft skills. It is expected that the findings of this study be provided across various forums (such as vocational education and training, and project management conferences) and via project management bodies such as the Australian Institute of Project Management (AIPM) to inform learning and provide greater insight into the soft skills of project management. It is the contention of the researcher that this quantitative study of Diploma of Project Management graduates’ views and attitudes highlights the importance of project soft skills and its importance in the delivery of successful projects as well as being part of the competencies of a successful project manager. This study also revealed the value of project experience and knowledge as it pertains to the management and application of the project soft skills.

The inherent equitable jurisdiction and the plenary power of the Supreme Court of New South Wales to order the winding up of companies

Not all companies in Australia are amenable to a winding up order pursuant to the Corporations Act 2001 (Cth). The Supreme Court of New South Wales has previously dealt with such winding up applications by apparently focusing on the inherent jurisdiction of the court to consider whether the court has jurisdiction to firstly consider the winding up application. This article proposes an original alternative paradigm: the plenary power provided to the court by s 23 of the Supreme Court Act 1970 (NSW) can be utilised to initially attract the jurisdiction of the court and subsequently the inherent jurisdiction specifically utilising the equitable “just and equitable” ground is available to the court to consider and make such a winding up order if appropriate. Variation of such a paradigm may also be available to the court when considering the inherent jurisdiction in relation to corporation matters more generally.