Models for reform : the directors’ duty of care in a modern commercial world

The Australian responses to corporate collapses in the modern commercial world have been
implemented at both judicial and legislative levels over a period of decades. South Africa has lagged behind the reform process, only recently reviewing its company laws with a view to legislatively incorporating, inter alia, its directors’ duties. The consequence of such review of the duty of care is found in subsection 76(3)(c) of the Companies Act 71 of 2008. This article critically evaluates the existing South African common law and the new legislative directors’ duty of care in light of the equivalent duties in Australia and the United States. The analysis ultimately aims at determining whether the approach taken in any of these jurisdictions provides useful guidance in regard to reform options for the duty of care. While the Companies Act contains features that are preferable to the Australian Corporations Act 2001, the impact of the Companies Act on crucial features, such as the objectivity of the duty of care, is unclear and will have to await judicial review. It is concluded that while the South African measures at times echo Australian law in a positive manner, the Australian legislative regime is not without legitimate criticism as it can be unnecessarily complicated. Ultimately it is the United States and Australian common law duty of care that provides the best model for legislative reform.

Enhancing procedural efficiency in multiple-industry ratio-based modeling of corporate collapse

This paper utilizes a methodological approach called Multi-Level Modeling (MLM) that addresses two major shortcomings in the two step analytic process that is traditionally adopted in the pertinent literature for modeling corporate collapse; thereby, enhancing procedural efficiency. The robustness of MLM vis-à-vis the traditional two-step procedure is ascertained using a data sample of Australian
publicly listed companies, equally split between collapsed and non collapsed, during the period 1989 to 2006. The results indicate that not only does MLM improve procedural efficiency, it does so while
enhancing the robustness of signaling corporate collapse; in particular, MLM signals collapse with an overall 6.6% increase in accuracy.

Executive compensation and corporate governance with special reference to Bangladesh; some emerging issues

This discussion paper considers corporate governance issues associated with executive compensation arrangements. An historical perspective is used to demonstrate the absence of a sound empirically-based understanding of good corporate governance practices in relation to share-based payment arrangements. The paper provides an overview of issues including the potential earnings dilution and volatility effects of the introduction of regulations affecting executive remuneration. Potential future research questions have been framed addressing each of the major issues identified in this paper. We conclude that corporate regulators should ensure they are familiar with and consider best practice models for corporate governance when developing new, or revising existing business regulation. It is proposed that further research to remedy this deficiency would enable a more accurate assessment of the impact of management on accounting regulation and the better design and implementation of regulation.

Suturing the body corporate (divine and human)in the Brahmanic traditions

In this discussion, we ponder the discourse about the ‘body of the Divine’ in the Indian tradition. Beginning with the Vedas, we survey the major eras and thinkers of that tradition, considering various notions of the Supreme Divine Being it produced. For each, we ask: is the Divine embodied? If so, then in what way? What is the nature of the body of the Divine, and what is its relationship to human bodies? What is the value of the body of the Divine to the spiritual aspirant? We consider, where relevant, which views are pantheistic and which might be considered panentheistic. Panentheism is connected with discourse on the world as the body of God. It has origins in medieval Christian theology with anticipatory traces in Plato’s Timeaus. Under pantheism, were the world to end—were it to collapse or disappear irreversibly, perhaps, into a huge black hole—then God would disintegrate without a remainder as well; for in this view the Divine Spirit is the universe. The same is not true under panentheism which posits a more complex relationship between the Divine and the world. According to panentheism, God pervades the world—God is in the world—and at the same time, God sustains the world—the world is in God. This allows that God be greater than, transcendent of and independent of the world. In our conclusion we remark on how the views we have surveyed link to, resonate with, or dis-compare with the current—should one say revivified—interest in intellectual quarters with panentheism.

Corporate governance of executive remuneration with special reference to Bangladesh

This discussion paper focuses on corporate governance issues associated with executive compensation arrangements. An historical perspective is used to demonstrate the absence of a sound empirically-based understanding of good corporate governance practices in relation to share-based payment arrangements. The paper provides an overview of issues including the potential earnings dilution and volatility effects of the introduction of regulations affecting executive remuneration. Potential research questions have been framed addressing each of the major issues identified in this paper. It is concluded that corporate regulators should ensure they are familiar with and that they consider best practice models for corporate governance when developing new or revising existing business regulation. It is proposed that further research to remedy this deficiency would enable a more accurate assessment of the impact of management on accounting regulation and the better design and implementation of regulation.

Share corporate social responsibility best practice and forgo competitive advantage

Cross-sector partnerships are capable of achieving solutions to large scale societal problems, which when successful, are well-publicized. Partnering organizations not only reap reputational acclaim but garner valuable organizational benefits. Membership within successful partnerships would undoubtedly be considered a competitive advantage, yet several of these successful relationships have chosen to forgo this valuable position. Instead of retaining intellectual property, partnering organizations are sharing successful processes and practices with peers and competitors. This research examined three examples of best practice cross-sector partnerships to identify relationship success factors, how they involved other organizations and why they shared successful social responsibility initiatives with others.

Virtue ethics, CSR and corporate citizenship

The Global Alliance for Public Relations and Communication Management values the dignity of the individual; human rights; and equal opportunity. Its Code of Ethics declares a professional’s duty to broader society. The code advocates education to reinforce this ethical outlook. This paper contributes a specific approach towards the practitioner’s ethical understanding. It enlists the critique of Alasdair MacIntyre who strongly criticises much conventional ethical theory. MacIntyre’s teleological approach is joined with a notion of a hierarchy of narratives of ethical expectations in an argument which counsels that public relations must always operate at the highest level of these narratives.

An empirical study of the world price of sustainability

The core goal of this study is to empirically investigate whether there is a “world price” of corporate sustainability. This is assessed in the context of standard asset pricing models—in particular, by asking whether a risk premium attaches to a sustainability factor after controlling for the Fama–French factors. Both time-series and cross-sectional tests are formulated and applied. The results show that (1) global Fama–French factors have strong power to explain global equity returns and (2) sustainability investments have no significant impact on global equity returns. The absence of a significant relationship between sustainability and returns implies that large institutional investors are free to implement sustainability mandates without fear of breaching their fiduciary duties from realising negative returns due to incorporating a sustainability investment process.

Reliance of external auditors on internal audit work : a corporate governance perspective

The literature suggests an increasing need for interactions among board of directors, management, internal audit and external audit as the four components of corporate governance and presents internal audit as a resource for the other components. External auditing standards that originated in the Western world, which are also being applied in developing countries, recommend external auditor’s reliance on internal audit to achieve audit efficiency. Nevertheless, whether this efficiency motive explains such reliance in corporate governance settings that differ from the West has not been sufficiently explored as yet. This study examines external auditor reliance on internal audit work using questionnaire survey of 119 external auditors in Ethiopia. Mann-Whitney U test results suggest that external auditors’ reliance on internal audit work is not significantly associated with the competitiveness of external audit sub-markets in Ethiopia. Results of multiple discriminant analysis indicate internal audit work performance is the most important factor that determines the extent of external auditors’ reliance on internal audit work. Overall, findings suggest that organizations can enhance corporate governance effectiveness by strengthening internal audit and fostering internal-external auditor coordination.

Perceptions of investors and stockbrokers on corporate social responsibility : a stakeholder perspective from India

This paper aims to understand the perceptions of shareholders and brokers regarding corporate social responsibility (CSR) initiatives by Indian companies. The research, presented in this paper, employs stakeholder theory to examine the perceptions of investors and sharebrokers on CSR in the context of a fast growing country, India. The data has been collected by using semistructured survey instrument. The findings of the study highlight that the respondents in both categories of stakeholder groups agree that CSR-oriented companies enjoy higher levels of investor confidence, which is reflected in higher stock prices, and leads to enhanced reputation and corporate goodwill. The research demonstrates that Indian companies are in fact implementing CSR initiatives and that stakeholders have a considerable interest in such initiatives. Both the groups expect higher CSR disclosures from large corporations and multinational companies operating in India. Educational initiatives have received maximum attention from the both the groups of stakeholders followed by the environmental issues. Investors are least aware of healthcare and rural development initiatives possibly because of the relatively low penetration of Indian financial markets into the rural areas. This study demonstrates that the stakeholder theory is a useful tool for collecting and evaluating CSR data and explains that the stakeholder perception of CSR performance determines corporate initiatives to a certain level. The findings would help in building consensus on strengthening the implementation and establishing the future CSR framework in emerging economies and other parts of the world. © 2014 John Wiley & Sons, Ltd.

Principles of contemporary corporate governance

Now in its third edition, Principles of Contemporary Corporate Governance offers comprehensive coverage of the key topics and emerging themes in corporate governance in the private sector. It explains both the principles of corporate governance systems and their real-world application in an authoritative and engaging manner. This fully updated edition includes a new chapter on shareholder activism and covers developments in the areas of corporate governance in the European Union, reporting, credit rating agencies, executive remuneration and board diversity. It addresses the impact of the GFC on corporate governance and the theoretical and economic aspects of governance, and further includes comparative sections, written by specialist contributors, on corporate governance in China, Indonesia, Japan and South Africa. Principles of Contemporary Corporate Governance is an indispensable resource for academic researchers, practitioners wanting a deeper understanding of the underlying principles of corporate governance and students of business and law studying corporate governance.

Problems and prospects for corporate governance in Bangladesh: Some case studies basis analysis

Bangladesh is one of the least economically developed countries in the world. A lack of corporate governance creates problem for the economic development of the country. This study has been undertaken to observe whether corporate governance is being well-executed in Bangladesh and to inform views about which approach to corporate governance will be more acceptable to the county. The study has examined six cases to see whether corporate governance is properly utilised in the country. It is suggested that monetary, fiscal and exchange rate policies should be applied with appropriate diligence by the Securities and Exchange Commission, the Bangladesh Bank and the National Board of Revenue. It is expected that value can be added through arranging primary and supportive activities. Attention to inbound and outbound logistics is likely to improve productivity, enhancing profitability, long run sustainability and creating distinct competencies for the Bangladesh economy. Ultimately this may help to improve gross domestic product and the basic needs of the population.

Investor protection, firm informational problems, big N auditors, and cost of debt around the world

This paper examines the effects of investor protection, firm informational problems (proxied by firm size, firm age, and the number of analysts following), and Big N auditors on firms' cost of debt around the world. Using data from 1994 to 2006 and over 90,000 firm-year observations, we find that the cost of debt is lower when firms are audited by Big N auditors, especially in countries with strong investor protection. Second, we find that firms with more informational problems (i.e., higher information asymmetry problems) benefit more from Big N auditors in terms of lower cost of debt only in countries with stronger investor protection.

Um Estudo sobre a avaliação da condução do processo de parcerias - o caso Telemar Corporate

The partnerships have become the subject of study as an innovative element in the production management and a strategic option in the entrepreneurial activities that characterize this momentum of great instability due to the globalization of the financial dimension and the opening of captive markets all over the world.The objective of this research was to investigate and evaluate the in-fluence and relevance of the factor process approach among the other critical factors identified for the strategic management of partnerships. In view of the service offer of Telecommunications, mainly in the Case Study of Telemar Corporate, that belongs to the Tele Norte Leste Group S.A. (Telemar) responsible for rendering services to the corporate market. A research was performed in the Diretoria de Produtos Empresariais - DPE, a unit of the Telemar Corporate, analyzing these critical factors in 3 clusters related to the constitution of part-nerships: the definition of the strategic objectives, the quality of the human re-sources applied and the management of the partnership processes. The Theoretical Reference contributed to the definition of contemporary concepts on the management and the classification of the partnerships as well as the identification of the critical factors. The research was methodological and exploratory, using in this Case Study the field search through the employment of interviews and questionnaires in a selected sample. It was possible to identify that among the more relevant critical factors the process approach, is the most influential and relevant for the management of the partnerships at Telemar Corporate. It is succeeded by other factors equally important, such as the definition of objectives and the strategic intention that confirms the initial hypothesis of this study.