Marion R. Hutchinson

Governance issues in accounting

Purpose - The purpose of this paper is to identify some key issues for the analysis of corporate governance based on the papers within this special issue including the Guest Editors perspectives. Design/methodology/approach - The five papers included in this special issue are summarized and their main contribution to the literature is highlighted. Findings - The paper collectively deal with the role and impact of corporate boards on the quality of information provided to capital markets. Practical implications - The theoretical and empirical research included in the special issue advance the understanding of corporate governance which provides impetus for practitioner and policy change. Originality/value - The normative concepts of best practice need to be validated by empirical testing in the context of firms and their institutional settings. This suite of papers provides evidence of the effectiveness of corporate governance in improving accounting quality.

Organisational commitment of accountants in Australia and South Africa

This paper examines the independent variables of perceived environmental uncertainty (PEU) and the cultural beliefs of collectivism/individualism between two countries, Australia and South Africa. These countries were chosen because Australia is a stable democracy and South Africa an emerging democracy which is undergoing significant political, social and economic transformation. The purpose of this paper is to determine whether accountants’ commitment to an organization is associated with perceived environmental uncertainty, collectivism and nationality. The results of this study suggest that individuals’ organisational commitment is associated with nationality (South African and Australian) and that relationship is associated with their cultural beliefs (collectivism/individualism) and an environmental variable, perceived environmental uncertainty. This research is regarded as important in that multi-national organizations operating in different political and social environments may choose to use different means to ensure the maximum organisational commitment from their employees, in particular, those who are professional accountants.

Is CEO Human Capital Related to Firm Performance

The global economy experienced continuous growth from 2002 to 2007 until the U.S. subprime mortgage crisis caused instability in worldwide stock markets. Simultaneously, global CEO turnover continued to fall to 13.8 percent in 2007. In contrast, the CEO turnover rate in Australia increased to 18 percent in 2007. The purpose of this paper is to determine whether the type of CEO human capital investment is associated with firm distress which sequentially is associated with firm performance. The empirical study of Australian listed firms (2005-2008) shows that the probability of bankruptcy is negatively associated with CEO’s general human capital and that firm distress is a significant determinant of CEO turnover. A CEO with more valuable firm specific human capital is less likely to be replaced/leave which in turn is associated increasing subsequent financial performance. Increasing financial performance is associated with decreasing investment in general human capital. These results are important because they imply that CEO firm specific experience is more important for increasing firm performance than general managerial skills despite the fact that recent research suggests that general human capital has increased in importance over firm-specific human capital.

Women in leadership: an analysis of the gender pay gap in ASX-listed firms

This study provides evidence that after several decades of fighting for equal pay for equal work, an unexplained gender pay gap remains amongst senior executives in ASX-listed firms. After controlling for a large suite of personal, occupational and firm observables, we find female senior executives receive, on average, 22.58 percent less in base salary for the period 2002–2013. When executives are awarded performance-based pay, females receive on average 16.47 percent less in cash bonus and 18.21 percent less in long-term incentives than males. The results are robust to using firm fixed effects and propensity-score matching. Blinder–Oaxaca decomposition results show that the mean pay gap cannot be attributed to gender differences in attributes, including job titles. Instead, the results point to differences in returns on firm-specific variables, in particular firm risk.

Valuing brand equity of a geographic region.

There is much anecdotal evidence and academic argument that the location of a business influences its value. That is, some businesses appear to be worth more than others because of their location. This is particularly so in the tourism industry. Within the domain of the destination literature, many factors can be posited on why business valuation varies, ranging from access to markets, availability of labor, climate, and surrounding services. Given that business value is such a fundamental principle that underpins the viability of the tourist industry through its relationship with pricing, business acquisition, and investment, it is surprising that scant research has sought to quantify the relative premium associated with geographic locations. This study proposes a novel way in which to estimate geographic brand premium. Specifically, the approach translates valuation techniques from financial economics to quantify the incremental value derived from businesses operating in a particular geographic region, and produces a geographic brand premium. The article applies the technique to a well-known tourist destination in Australia, and the results are consistent with a positive value of brand equity in the key industries and are of a plausible order of magnitude. The article carries strong implications for business and tourism operators in terms of valuation, pricing, and investment, but more generally, the approach is potentially useful to local authorities and business associations when deciding how much resource and effort should be devoted to brand protection.