Governance of Director and Executive Remuneration in Leading Firms of Australia

• Autorzy: Zahid Riaz , James Kirkbride
• Języki publikacji: EN

Abstrakty

EN

The aim of the paper is to examine how the introduction of state regulation and self-regulation impacts on the disclosure of director and executive remuneration in Australia. In doing so, we step beyond the simple state-market dichotomy in the extant literature, and proposes a symbiotic association between both regulatory modes for remuneration governance. The study reveals that remuneration disclosure levels are significantly higher after the advent of both self-regulatory and state regulatory reforms rather than state regulation alone. Furthermore, foreign-MNCs which experience increased agency problems due to spatial complexities and increased liabilities of foreignness do not have a superior disclosure level of director and executive remuneration: findings with important messages for policy makers and for regulators. (original abstract)

Słowa kluczowe

EN

Corporate governance; Globalization; Agency theory; Institutionalism; Information disclosure; Remuneration

PL

Ład korporacyjny; Globalizacja; Teoria agencji; Instytucjonalizm; Jawność informacji; Wynagrodzenia

• Czasopismo: Economics and Business Review
• Rocznik: 2017
• Tom: 3 (17)
• Numer: nr 4
• Strony: 66--86

Twórcy

autor

Zahid Riaz

• Lahore School of Economics, Pakistan

autor

James Kirkbride

• The University of Salford, United Kingdom

Bibliografia

• Ahmed, K., & Courtis, J. K. (1999). Associations between corporate characteristics and disclosure levels in annual reports: a meta-analysis. The British Accounting Review, 31(1), 35-61. Retrieved from http://doi.org/10.1006/bare.1998.0082.
• Aguilera, R. V., & Jackson, G. (2010). Comparative and international corporate governance. The Academy of Management Annals, 4(1), 485-556. Retrieved from http:// doi.org/10.1080/19416520.2010.495525.
• Akerlof, G. A., & Shiller, R. J. (2010). Animal spirits: How human psychology drives the economy, and why it matters for global capitalism. Princeton University Press.
• Andjelkovic, A., Boyle, G., & McNoe, W. (2002). Public disclosure of executive compensation: Do shareholders need to know? Pacific Basin Finance Journal, 10(1), 97-117. Retrieved from http://doi.org/10.1016/S0927-538X(01)00034-8.
• ArAs, G. (2016). A handbook of corporate governance and social responsibility. CRC Press.
• ASIC and ASX. (2004). Memorandum of understanding between ASIC and ASX. Sydney.
• ASX. (2003). Principles of good corporate governance and best practice recommendations. Australian Stock Exchange Limited. Retrieved from http://www.shareholder. com/shared/dynamicdoc/ASX/364/ASXRecommendations.pdf.
• ASX. (2008). Principles of good corporate governance. Sydney.
• Bailey, B. (2003). Report of the Royal Commission into HIH Insurance. Law and Bulls Digest Group. Research Note, (32), 3. Retrieved from http://www.aph.gov.au/library/ Pubs/RN/200203/03rn32.html.
• Barkema, H. G., & Gomez-Mejia, L. R. (1998). Managerial compensation and firm performance: A general research framework. Academy of Management Journal, 41(2), 135-145. Retrieved from http://doi.org/10.2307/257098.
• BCA. (2003). Submission to the treasury on the corporate law economic reform program (audit reform and corporate disclosure) bill. Melbourne: Business Council of Australia. Retrieved from http://www.bca.com.au/DownloadFile.aspx?FileName=BCA_ CLERP_9_Legislation_Su bmission_Treasury.pdf.
• Beattie, V., McInnes, B., & Fearnley, S. (2004, September). A methodology for analysing and evaluating narratives in annual reports: a comprehensive descriptive profile and metrics for disclosure quality attributes. Accounting Forum (Vol. 28, No. 3, pp. 205-236). Elsevier.
• Bell, A. (2009). Australia "a model" for GFC recovery. The Sydney Morning Herald, 1.
• Betta, M. (2016). Three Case Studies: Australian HIH, American Enron, and Global Lehman Brothers. In Ethicmentality-Ethics in Capitalist Economy, Business, and Society (pp. 79-97). Springer Netherlands.
• Bolt, C. (2004). Higher pay urged for boards. The West Australian, 41.
• Bushman, R. M., & Smith, A. J. (2001). Financial accounting information and corporate governance. Journal of Accounting and Economics, 32(1), 237-333.
• Cahan, S. F., Rahman, A., & Perera, H. (2005). Global diversification and corporate disclosure. Journal of International Accounting Research, 4(1), 73-93.
• Carpenter, M. A., & Sanders, W. G. (2004). The effects of top management team pay and firm internationalization on MNC performance. Journal of Management, 30(4), 509-528.
• Carson, E. (2002). Factors associated with the development of board sub-committees. Corporate Governance: An International Review, 10(1), 4-18.
• Cerf, A. R. (1961). Corporate reporting and investment decisions. Public Accounting Research Program, Institute of Business and Economic Research, University of California.
• Charles, M. (2004). $8.8 million disgrace. The Advertiser, 1.
• Cheffins, B. R. (2003). Will executive pay globalise along American lines?. Corporate Governance: An International Review, 11(1), 8-24.
• Clarkson, P., Van Bueren, A. L., & Walker, J. (2006). Chief executive officer remuneration disclosure quality: corporate responses to an evolving disclosure environment. Accounting & Finance, 46(5), 771-796.
• Coffee Jr, J. C. (1984). Market failure and the economic case for a mandatory disclosure system. Virginia Law Review, 717-753.
• Conyon, M. J., & Peck, S. I. (1998). Board control, remuneration committees, and top management compensation. Academy of Management Journal, 41(2), 146-157.
• Cooke, T. E. (1992). The impact of size, stock market listing and industry type on disclosure in the annual reports of Japanese listed corporations. Accounting and Business Research, 22(87), 229-237.
• Coulton, J., James, C., & Taylor, S. L. (2001). The effect of compensation design and corporate governance on the transparency of CEO compensation disclosures. Working paper, University of Technology, No. 45.
• Dechow, P. M., Sloan, R. G., & Sweeney, A. P. (1996). Causes and consequences of earnings manipulation: An analysis of firm's subject to enforcement actions by the SEC. Contemporary Accounting Research, 13(1), 1-36.
• Denis, D. K. (2001). Twenty-five years of corporate governance research... and counting. Review of Financial Economics, 10(3), 191-212.
• Desmond, P. (2000). Twenty-first century investing-conclusions from the five dinner dialogues. In The 3rd International Conference on Corporate Governance and Direction, Henley.
• Donnelly, R., & Mulcahy, M. (2008). Board structure, ownership, and voluntary disclosure in Ireland. Corporate Governance: An International Review, 16(5), 416-429.
• Du Plessis, J. J., Hargovan, A., & Bagaric, M. (2010). Principles of contemporary corporate governance. Cambridge University Press.
• Easterbrook, F. H., & Fischel, D. R. (1984). Mandatory disclosure and the protection of investors. Virginia Law Review, 669-715.
• Eisenhardt, K. M. (1989). Agency theory: An assessment and review. Academy of Management Review, 14(1), 57-74.
• Fama, E. F., & Jensen, M. C. (1983). Separation of ownership and control. The Journal of Law and Economics, 26(2), 301-325.
• Farrar, J. (2008). Corporate governance: theories, principles and practice. Oxford University Press.
• Ferran, E. (2001). Corporate Law, Codes and Social Norms - Finding the Right Regulatory Combination and Institutional Structure. Journal of Corporate Law Studies, 1(2), 381-409.
• Field, A. (2013). Discovering statistics using IBM SPSS statistics. London: Sage.
• Fiss, P. C. (2007). Institutions and corporate governance. In Greenwood, R., Oliver, C., Suddaby, R. & Sahlin-Andersson, K. (Ed.), The SAGE handbook of organizational institutionalism (pp. 389-410). London: Sage Publications Limited.
• Ford, C. (2010). Principles-based securities regulation in the wake of the global financial crisis. McGill LJ, 55, 257.
• Fox, M. B. (1997). Securities Disclosure in a Globalizing Market: Who Should Regulate Whom. Michigan Law Review, 95(8), 2498-2632.
• Gomez-Mejia, L. R., & Balkin, D. B. (1992). Determinants of faculty pay: An agency theory perspective. Academy of Management Journal, 35(5), 921-955.
• Gore, A. K. (2004). The effects of GAAP regulation and bond market interaction on local government disclosure. Journal of Accounting and Public Policy, 23(1), 23-52.
• Hart, O. (1995). Corporate governance: some theory and implications. The Economic Journal, 105(430), 678-689.
• Hill, J. G. (2005). Regulatory responses to global corporate scandals. Wisconsin International Law Journal, 23, 367-416.
• Hill, J. G. (2006). Regulating executive remuneration: International developments in the post-scandal era. European Company Law, 3, 64.
• Hill, J. G. (2012) Why did Australia fare so well in the global financial crisis? In: Ferran, E., Moloney, N., Hill, J. G., & Coffee Jr, J. C. (Ed.). The regulatory aftermath of the global financial crisis (pp. 203-300). London: Cambridge University Press.
• Hood, C. (1996) Where extremes meet: SPRAT vs SHARK in public risk management. In HOOD, C. & JONES, D. K. C. (eds.) Accident and design: Contemporary debates in risk management (pp. 208-228). London: UCL Press.
• Hughes, A. (2003). Morgan hits back at 'bad law'. The Age. Sydney. Retrieved from http://www.theage.com.au/articles/2003/12/01/1070127348871.html.
• Husted, B. W. (2007). Agency, information, and the structure of moral problems in business. Organization Studies, 28(2), 177-195.
• Ingram, R. W., & DeJong, D. V. (1987). The effect of regulation on local government disclosure practices. Journal of Accounting and Public Policy, 6(4), 245-270.
• Jensen, M. C., & Meckling, W. H. (1976). Theory of the firm: managerial behavior, agency costs and ownership structure. Journal of Financial Economics, 3(4), 305-360.
• Kay, I., & Van Putten, S. (2007). Myths and realities of executive pay. Cambridge University Press.
• Khanna, T., Palepu, K. G., & Srinivasan, S. (2004). Disclosure practices of foreign companies interacting with US markets. Journal of Accounting Research, 42(2), 475-508.
• Kirkbride, J., & Letza, S. (2004). Regulation, Governance and Regulatory Collibration: achieving an "holistic" approach. Corporate Governance: An International Review, 12(1), 85-92.
• Kirkbride, J., & Letza, S. (2003). Establishing the boundaries of regulation in corporate governance: Is the UK moving toward a process of collibration?. Business and Society Review, 108(4), 463-485.
• Kirkpatrick, G. (2009). The corporate governance lessons from the financial crisis. OECD Journal: Financial Market Trends, 2009(1), 61-87.
• Kohler, A. (2001). The year of corporate collapses. Australian Broadcasting Corporation. Sydney. Retrieved from http://www.abc.net.au/7.30/content/2001/s445523.html.
• Kostova, T., Nell, P. C., & Hoenen, A. K. (2016). Understanding Agency Problems in Headquarters-Subsidiary Relationships in Multinational Corporations a Contextualized Model. Journal of Management, 0149206316648383.
• La Porta, R., Lopez-de-Silanes, F., Shleifer, A., & Vishny, R. W. (2000). Agency problems and dividend policies around the world. The Journal of Finance, 55(1), 1-33.
• Laswad, F., Fisher, R., & Oyelere, P. (2005). Determinants of voluntary Internet financial reporting by local government authorities. Journal of Accounting and Public Policy, 24(2), 101-121.
• Laswad, F., Fisher, R., & Oyelere, P. (2005). Determinants of voluntary Internet financial reporting by local government authorities. Journal of Accounting and Public Policy, 24(2), 101-121.
• Letza, S. (2017). Corporate governance and the African business context: The case of Nigeria. Economics and Business Review, 17(1), 184-204.
• Levi-Faur, D., & Parker, C. (2010). Three narratives of the Global Financial Crisis. Socio-Economic Review [P], 8, 547-553.
• Liu, J., & Taylor, D. (2008). Legitimacy and corporate governance determinants of executives' remuneration disclosures. Corporate Governance: The International Journal of Business in Society, 8(1), 59-72.
• Luo, Y. (2005). How does globalization affect corporate governance and accountability? A perspective from MNEs. Journal of International Management, 11(1), 19-41.
• Mahoney, P. G. (1995). Mandatory disclosure as a solution to agency problems. The University of Chicago Law Review, 62(3), 1047-1112.
• McConvill, J. (2004). An introduction to CLERP 9. LexisNexis Butterworths.
• McMurtry, J. (2013). The cancer stage of capitalism: from crisis to cure. Pluto Press.
• Meek, G. K., Roberts, C. B., & Gray, S. J. (1995). Factors influencing voluntary annual report disclosures by US, UK and continental European multinational corporations. Journal of International Business Studies, 26(3), 555-572.
• Nell, P. C., Puck, J., & Heidenreich, S. (2015). Strictly limited choice or agency? Institutional duality, legitimacy, and subsidiaries' political strategies. Journal of World Business, 50(2), 302-311.
• Nordberg, D. (2017). Board ethos and institutional work: developing a corporate governance identity through developing the UK code. Economic and Business Review, 17(1), 73-96.
• OECD. (2009). the Financial Crisis: Key Findings and Main Messages. Organization for Economic Cooperation and Development (OECD), 19. Retrieved from http://www. oecd.org/dataoecd/3/10/43056196.pdf.
• Owusu-Ansah, S., & Yeoh, J. (2005). The effect of legislation on corporate disclosure practices. Abacus, 41(1), 92-109.
• Pache, A. C., & Santos, F. (2010). When worlds collide: The internal dynamics of organizational responses to conflicting institutional demands. Academy of Management Review, 35(3), 455-476.
• Patton, J., & Zelenka, I. (1997). An empirical analysis of the determinants of the extent of disclosure in annual reports of joint stock companies in the Czech Republic. European Accounting Review, 6(4), 605-626.
• Quinn, M. (1999). The unchangeables-Director and executive remuneration disclosure in Australia. Australian Journal of Corporate Law, 10(1), 89-107.
• Raffournier, B. (1995). The determinants of voluntary financial disclosure by Swiss listed companies. European Accounting Review, 4(2), 261-280.
• Riahi-Belkaoui, A. (2001). Level of multinationality, growth opportunities, and size as determinants of analyst ratings of corporate disclosures. American Business Review, 19(2), 115.
• Riaz, Z. (2016). A hybrid of state regulation and self-regulation for remuneration governance in Australia. Corporate Governance, 16(3), 539-563.
• Riaz, Z., Ray, S., Ray, P. K., & Kirkbride, J. (2013). Collibration as an alternative regulatory approach for remuneration governance: A contextual analysis of Australia. International Journal of Disclosure and Governance, 10(3), 246-260.
• Riaz, Z., Ray, S., Ray, P. K., & Kumar, V. (2015). Disclosure practices of foreign and domestic firms in Australia. Journal of World Business, 50(4), 781-792.
• Riaz, Z., Ray, S., & Ray, P. (2015). The Synergistic Effect of State Regulation and Self- Regulation on Disclosure Level of Director and Executive Remuneration in Australia. Administration & Society, 47(6), 623-655.
• Sanders, W. G., & Carpenter, M. A. (1998). Internationalization and firm governance: The roles of CEO compensation, top team composition, and board structure. Academy of Management Journal, 41(2), 158-178.
• Sheehan, K. (2009). The regulatory framework for executive remuneration in Australia. Sydney L. Review, 31, 273.
• Slipper, P. (2004). CPA-Australia-accounting at the top end. Canberra: The Australian Government, Ministry for Finance and Administration. Retrieved From www.parlsecfinance. gov.au/speeches/2004/sp_2000406011_cpa.html.
• Smith, D. K. (2004). Beyond the rule of law? Decentered regulation in online investing. Law & Policy, 26(3-4), 439-476.
• Sykes, T. (1998). Two centuries of panic: a history of corporate collapses in Australia. Allen & Unwin.
• Tabachnick, B. G., Fidell, L. S., & Osterlind, S. J. (2001). Using multivariate statistics. Boston: Allyn and Bacon.
• Tosi, H. L., Werner, S., Katz, J. P., & Gomez-Mejia, L. R. (2000). How much does performance matter? A meta-analysis of CEO pay studies. Journal of Management, 26(2), 301-339.
• Verbruggen, P. (2009). Does Co-Regulation Strengthen EU Legitimacy?. European Law Journal, 15(4), 425-441.
• Wallace, R. O., & Naser, K. (1995). Firm-specific determinants of the comprehensiveness of mandatory disclosure in the corporate annual reports of firms listed on the stock exchange of Hong Kong. Journal of Accounting and Public Policy, 14(4), 311-368.
• Williamson, O. (1984). Corporate governance. Yale Law Journal, 93, 1197-1230.
• Windsor, D. (2009). Tightening corporate governance. Journal of International Management, 15(3), 306-316.
• Yasser, Q., Mamun, A. (2016). Audit committee structure and earnings management in Asia Pacific. Economics and Business Review. 16(1), 66-84.
• Zaheer, S. (1995). Overcoming the liability of foreignness. Academy of Management Journal, 38(2), 341-363.

Identyfikatory

DOI

10.18559/ebr.2017.4.5