Effects Of New Regulations Research Articles

Corporate Governance Failures as a Reason for UK Banking Crisis

The present research paper aims to explore the corporate governance failures which acted as a reason for the crisis of 2008 and examine the possibility of creation of more effective corporate governance model by convergence. For the purpose of clarity and efficiency of the research, it focuses mainly on information regarding banking crisis and reform of corporate regulations in United Kingdom. General information is given for observation of global concerns on financial crisis and various corporate governance models. The first part of this document illustrates the failures of corporate governance mechanisms in banking and financial sector of the United Kingdom which in a manner forced the banking crisis in the country. The evidence shows that the corporate governance issues as risk management, remuneration, shareholder activism and board qualifications in a financial sector were not resistant and effective as to the risky operations which were conducted by the financial sector of the country in a usual basis. In the second part of this document the actions of the UK government in a form of various improvements and reforms in regard of corporate governance mechanisms are presented and reviewed by following the arguments regarding the effectiveness of new regulations and their maturity as for the post crisis measures. Finally, the third part of the paper contains my personal hypothesis which is based on the convergence theory of various scholars and the hypothesis present idea of creation of more effective and crisis-resistant model of corporate governance by convergence. I argue that even though the improvements of corporate governance models through adopting models from foreign jurisdictions is the complicated process, it should be implemented so in order to avoid some factors which can cause negative effects, and combine the positive functions of the main corporate models.

How does Australia’s largest dolphin-watching industry affect the behaviour of a small and resident population of Indo-Pacific bottlenose dolphins?

The small, genetically distinct population of Indo-Pacific bottlenose dolphins (Tursiops aduncus) in Port Stephens, New South Wales (NSW), is the target of the largest dolphin-watching industry in Australia and is located within the Port Stephens - Great Lakes Marine Park that was created in 2005. The effects of this industry have been identified as of significant management importance by the Marine Parks Authority NSW. Accordingly, the impact of commercial dolphin-watching boats was investigated from boat-based surveys from August 2008 to August 2009. Presence of dolphin-watching boats altered both the dolphins' behavioural states and activity budgets. Dolphins spent 66.5% less time feeding and 44.2% less time socialising, spent four times more milling, and were never observed to rest in the presence of dolphin-watching boats. Moreover, dolphin groups were more cohesive during dolphin-watching boat encounters and dolphins tended to avoid tour boats. These effects were exacerbated as the number of boats increased and the distance from boats decreased. The rate of approach was high with boats approaching each dolphin group three times per day in winter and six times in summer. Moreover, groups of dolphins with newborns were approached closer than state regulated minimum approach distances in nine out of ten encounters. Globally, dolphin-watching industries frequent small resident groups of coastal dolphins and effects are likely to be similar. We suggest that existing controls are inadequate and that these together with additional regulations be enforced by a regular presence of authorities. We suggest no more than one dolphin-watching boat within 50 m of a group of dolphins, or 100 m if calves are present. Operating times of dolphin-watching boats should be restricted in numbers after 1 pm, i.e., during preferred foraging times for dolphins. Additionally, exclusion zones should be considered to reduce pressure on dolphins undertaking critical activities such as feeding and resting. We recommend monitoring the effectiveness of new regulations that are incorporated in the reviewed marine park management plan in 2012 for a period of three years.

Board Monitoring and Earnings Management Pre- and Post-IFRS

In this paper, we address the question of whether the board of directors is more effective in constraining earnings management after the mandatory application of IFRS. Specifically, we explore how two board characteristics — board independence and (2) the existence of an audit committee impact earnings management. Our empirical results suggest that board independence and audit committees play an important and effective role in reducing earnings management after the introduction of IFRS and that the accounting regulatory framework significantly contributes to the effectiveness of the two corporate governance mechanisms. Our findings also confirm that a company's corporate governance characteristics remain an important determinant of earnings quality; therefore, an analysis of the effects of new regulations must consider firm-level determinants.

The effects of corporate governance, bank risks and capital on bank performance in Malaysia (2004-2009)

This study seeks to investigate the effects of corporate governance, risk and capital on the performance of Malaysian banks. This gives incremental insights on the effects of new regulations; revised Malaysian Code on Corporate Governance (MCCG, 2007) and the implications of this code on the performance of Malaysian banks. This is by addressing the level of boards and audit committees independence, risks and the level of risks weighted capital (RWC) on banks performance. In particular, this study aims to investigate whether regulations improves banks performance.

Corporate governance and corporate social responsibility: lessons from the land of OZ

Australia corporate boards and senior management have been spirited from the Land of Milk and Honey (profit) to the Land of OZ. They are to embark on a journey, following the “yellow-brick road”, a proverbial path to a promised land of one’s hopes and dreams, in order to find brains, a heart and courage. The effect of new regulations introduced in Australia to curtail corporate misbehaviour is detailed by storytelling. The Wizard of OZ is the title of a story written by L. Frank Baum and published in 1899. In 1939, Metro Goldwyn Mayer Studios made a movie of the story. I have used The Wizard of Oz to argue that corporate boards and senior management need to make decisions using a balance of intellect (brains), emotionality (heart), and a sense of purpose (courage). The inspiration for using Baum’s story, as an analogy for the transformation needed in corporate boards and senior management, comes from Biberman and Whitty (Journal of Organisational Change Management 10(2):130–188, 1997). This research is based on interviews with Board members and non-executive directors from five companies listed in the Business Review Weekly (BRW) Top Twenty-five Companies in Australia (2007) and a range of secondary data sources. The financial and reputational success of the organisation and its members is out of balance with the human and social costs and benefits. Respondents confirmed that board members and senior management should willingly provide information about the corporation and its activities to its stakeholders, that information and data should be transparent, the true extent of director remuneration should be revealed and that financial reporting should be true and accurate. Board members and senior management can be assisted to operate in a way that observes socially responsible values and balances the obligation for profit maximisation with corporate social responsibilities (CSR). This study provides steps that organisations can take to achieve a balance of intellect, emotionality and sense of purpose and therefore realise their corporate social responsibility. The results of this empirical and secondary research suggest a method that may be used to make board members and senior managers more aware of their corporate social responsibilities and curtail corporate misbehaviour where the introduction of a range of new regulations has had little effect.

Directed Brokerage no More: The Effects of New Regulation in the Mutual Fund Industry

There is an extensive literature documenting a mutual fund performance deficit, whereby a large number of mutual funds underperform the market index. One possible cause is conflicts of interest between mutual funds and investors. I explore the consequences of a new regulation prohibiting funds from rewarding brokers' promotion efforts via trade execution. While this new rule targeted the elimination of excessive trading commissions, I document that it indirectly affected portfolio management style, fees, performance, and the competitive dynamics of the industry. The new rule led to a decrease in portfolio turnover and an increase in returns for affected funds. However, evidence also indicates that brokers have begun compensating for lost revenues from directed brokerage commissions by implementing revenue sharing agreements. Although affected funds have lower inflows after the regulation, suggesting that brokers' bias is partly eliminated, revenue sharing agreements appear to be the new means of increasing fund inflows.