Geoffrey C. Kiel

Board Composition and Corporate Performance: how the Australian experience informs contrasting theories of corporate governance

In many respects, Australian boards more closely approach normative “best practice” guidelines for corporate governance than boards in other Western countries. Do Australian firms then demonstrate a board demographic-organisational performance link that has not been found in other economies? We examine the relationships between board demographics and corporate performance in 348 of Australia’s largest publicly listed companies and describe the attributes of these firms and their boards. We find that, after controlling for firm size, board size is positively correlated with firm value. We also find a positive relationship between the proportion of inside directors and the market-based measure of firm performance. We discuss the implications of these findings and compare our findings to prevailing research in the US and the UK.

CAN DIRECTORS IMPACT PERFORMANCE? A CASE BASED TEST OF THREE THEORIES OF CORPORATE GOVERNANCE

We examine hypothesised links between the board of directors and firm performance as predicted by the three predominant theories in corporate governance research, namely agency theory, stewardship theory and resource dependence theory. By employing a pattern matching analysis of seven cases, we are able to examine the hypothesised link between board demography and firm performance expected under each theory. We find that while each theory can explain a particular case, no single theory explains the general pattern of results. We conclude by endorsing recent calls for a more process-orientated approach to both theory and empirical analysis if we are to understand how boards add value.

BREAKTHROUGH BOARD PERFORMANCE: HOW TO HARNESS YOUR BOARD'S INTELLECTUAL CAPITAL

To date, corporate governance research agendas have tended to concentrate on one particular role that a board performs. For instance, agency theory concentrates on the monitoring role, resource dependence theory concentrates on the board providing access to resources and stewardship theory concentrates on the board’s advice‐giving or strategic role. While these approaches provide practitioners with useful guidelines regarding issues such as board independence, we contend that practitioners need to take care not to act on the recommendations from a single theory in isolation from the others. To address this concern, we provide a model of board effectiveness that uses the construct of board intellectual capital to integrate the predominant theories of corporate governance and illustrate how the board can drive corporate performance. We further contend that boards that wish to improve their performance need to review their intellectual capital. We conclude by linking the model to a practitioner‐focused framework that identifies four key areas on which a board must concentrate to develop its intellectual capital.

Perceptions of Marketing Journals by Senior Academics in Australia and New Zealand

Increasingly, business schools are under pressure to produce quality outputs, including high quality international refereed journal publications. Understanding senior Australian and New Zealand marketing academics’ views of journal quality is valuable to individual scholars and to the marketing discipline. This paper presents the findings of a study of such perceptions provided by senior academics in Australia and New Zealand. A survey containing a comprehensive list of 73 journals was sent to all professorial members of ANZMAC and Heads of Marketing Schools in Australia and New Zealand, with an overall response rate of 45%. Respondents rated the journals on a 5-point quality scale and means of ratings were used to establish overall rank. The results suggested that, while senior faculty in Australia and New Zealand have their own distinct perceptions of journal quality, these views are not inconsistent with international views. The implications of the results and directions for future research are discussed.

Gendered perceptions of experiential value in using web‐based retail channels

Purpose – This paper compares the experiential consumption values that motivate consumer choice to purchase online for both male and female purchasers and non-purchasers. Design/methodology/approach – Using the theory of consumption value the study examines gendered perceptions of the functional, social and conditional value of using a virtual consumption setting for purchasing. Data was collected through an online survey and analysed using multiple discriminant analysis to determine meaningful differences between male and female purchasers and non-purchasers. Findings – The findings show that male online purchasers are discriminated from female purchasers by social value and from male non-purchasers by conditional value. Female purchasers are discriminated from male purchasers by functional value and from female non-purchasers by social value. Female non-purchasers are discriminated from female purchasers by conditional value. Male non-purchasers are discriminated from male purchasers by functional and social value. Research limitations/implications – Limitations include using an Internet survey and an Australian sample which may impact the generalisability of the findings to a wider population of Internet users. Future research should involve replication of the study in a country more or less developed in terms of gender composition of internet users to extend the generalisability of the findings. Additionally, researchers should examine whether other dimensions of consumption value,such as social influence through on- and off-line communication networks, may influence consumer choice to purchase online. Practical implications – The study provides practical implications for marketers to leverage consumption values that influence male and female consumers’ choice to purchase online and then drive their behaviour online through integrated marketing campaigns that involve both on- and offline strategies. Originality/value – The research makes an original contribution to the consumer behaviour literature as to date, no research has been found that undertakes such a comprehensive gender-based comparison of the perceived value of using a virtual consumption setting for purchasing.

Multiple Directorships and Corporate Performance in Australian Listed Companies

How many directorships are too many? Globally, normative advice emphasises the importance of limiting the number of directorships any individual should hold due to the workloads they entail. However, there is little empirical evidence to support this view. Rather, there is a strong tradition of supporting multiple directorships as a mechanism for the firm to co-opt external resources. To explore the issue of director workloads and multiple directorships, we first consider the issues related to multiple directorships and outline the conclusions of extant international and Australian studies into multiple directorships. We then detail our objectives in undertaking this research and our approach to data collection. Copyright (c) 2006 The Authors; Journal compilation (c) 2006 Blackwell Publishing Ltd.

Understanding Web Information Search Behavior: An Exploratory Model

Information search behavior is a key concept in the study of consumer behavior. Information search behavior has been extensively studied in traditional consumer decision-making environments. Studies include: Copeland (1917), Katona and Mueller (1955), Kiel and Layton (1981), Newman and Lockeman (1975), Punj and Staelin (1983), Srinivasan and Ratchford (1991), and Titus and Everett (1995, 1996). In addition, researchers from other disciplines have researched information search in other environments. Examples include: physical shopping environments (Titus and Everett,1995, 1996); hypertext (Conklin, 1987; Kerr, 1990; McDonald and Stevenson, 1996; Mohageg, 1992); and, Web browser usage (Catledge and Pitkow, 1995; Tauscher, 1996; Tauscher and Greenberg, 1997). A number of models of information search behavior have been formulated. Notable examples include Maute ABSTRACT

Marketing Planning Practices in Australia: A Comparison across Company Types

Numerous studies have made it clear that many businesses, both in Australia and overseas, have not yet adopted a marketing plan as a basic operational tool. A mail study was conducted to survey the use of marketing plans in different types of Australian companies. Analysis of the survey results indicated that: (1) the prime responsibility for preparing and approving marketing plans varies between company type, (2) the time period of marketing plans varies between company type, (3) companies with high sales turnovers tend to incorporate a longer time horizon into their marketing plan, (4) no relationship was found between awareness and usage levels of planning tools and company type, and (5) companies with high sales turnovers have an average level of awareness and use of planning tools. Recommendations are made based on these findings.

The Contribution of Social Norms to the Global Financial Crisis: A Systemic Actor Focused Model and Proposal for Regulatory Change

Manuscript Type: Conceptual. Research Question/Issue: Conventional regulatory reforms of the financial system focus on standard economic assumptions of self‐interested, rational actors. The Global Financial Crisis (GFC) and similar financial failures highlight that there are limits to this approach. Instead we use a norm‐based (or soft law) perspective to examine how the systemic problems underlying the GFC lay not so much in neo‐classical economic assumptions of self‐interest, but in unchecked financial innovation exploited by norms of buyer beware and ratings agency reliance among market participants. Fueled by sector‐wide remuneration practices, these norms created information asymmetries that fundamentally undermined the integrity of the market. Research Findings/Insights: We present a model that highlights how investment banks, as professional service firms, have superior information to their clients. This presents an information asymmetry problem whereby they can exploit the market norm of caveat emptor (buyer beware) when developing innovative financial transactions. We propose a model highlighting how flawed financial innovation can lead to widespread, systemic problems of assessing and pricing risk because market participants can actively develop and promote flawed transactions. This problem is exacerbated where there is an over‐reliance on credit ratings agencies (due to the high information and search costs facing buyers) and a reduced emphasis on director fiduciary duties in financial Special Purpose Entities. Theoretical/Academic Implications: Social norms that underpin financial markets are central to market regulation. Our approach provides a re‐examination of the often unquestioned use of universal norms for differing market transactions in the financial sector. Researchers need to explore the interaction between social norms and market contexts (such as financial innovation) to better understand the behavior of financial markets. We contend that a mismatch between norms and market mechanisms can lead to significant unintended outcomes. Our approach of combining soft law (norms) and hard law (regulation) approaches to regulation provides added insights into agency, stewardship, and institutional theories. Practitioner/Policy Implications: Regulators need to understand norms and financial market contexts to develop better legislative interventions. Specifically, differentiating between transaction types in financial markets will address the problems associated with information and search costs facing buyers of flawed financial innovation. We also provide proposals for policy makers seeking to embed accountability for risk taking across the key participants in the financial system to minimize market distortions in the majority of the financial sector.

Money or Motivation?: Compensating the Salesforce

Reports a study of the salesforce compensation practices in manufacturing companies which is the first of its kind undertaken in Australia. Australian companies rely heavily on salary as the main form of salesforce compensation, unlike in the USA where the majority of salespeople are rewarded using commission‐based means. To a lesser extent, this is also true for Britain. The companies in this study, like many European firms, make relatively little use of performance‐related compensation methods such as commission. These findings are surprising, given that most companies reported that the main objective of their compensation plans was to reward above average performance. Such discrepancies between objectives and methods appear to be widespread and can, in part, be related to the social and legal environment in which Australian companies operate.