William Nikolakis

How Does Corporatization Improve the Performance of Government Agencies? Lessons From the Restructuring of State-Owned Forest Agencies in Australia

ABSTRACT Corporatization, or the adoption of more business-like practices or governance arrangements by government agencies, has been shown to lead to improvements in performance. However, why corporatization leads to improved performance is not well understood. There are competing theories as to how corporatization may improve performance, but because of confounding factors empirical studies have difficulty in identifying causal relationships. We address these issues in our analysis of the corporatization of six Australian state forest agencies that took place in the past two decades, focusing on: (1) improvements in efficiency and (2) improved profitability or cost recovery. The results confirm that corporatization leads to enhanced commercial performance through improving clarity around business decisions and increasing the autonomy of managers. A key feature is the establishment of new governance arrangements and how they are implemented. Our results suggest that mechanisms such as the creation of an “independent” board of directors are important to create an “arms length” relationship between the government and the new entity, thereby improving clarity in business decisions.

Who Pays Attention to Indigenous Peoples in Sustainable Development and Why? Evidence From Socially Responsible Investment Mutual Funds in North America

Resource extraction and development have had significant impacts on Indigenous Peoples (IPs), and states have been slow to respond. The need for better engagement practices with IPs has been recognized internationally and in the academic literature. We examine the extent to which IPs and their rights are being recognized by non–state market–driven governance mechanisms meant to promote more sustainable business practices, in this case North American socially responsible investment (SRI) mutual funds. These funds are influential in defining SRI principles, and through shareholder activism they influence broader standards on corporate social responsibility and firm sustainability. Using a survey and a review of secondary internal documentation, we find that while some SRI funds do address IPs, recognition remains low. We find SRI funds that do pay attention have both more capabilities and a different investment orientation than those that do not, which we hypothesize limits broader uptake at this time.

What matters for socially responsible investment (SRI) in the natural resources sectors? SRI mutual funds and forestry in North America

Socially responsible investment mutual funds have played an active role in encouraging sustainability in the natural resources sectors, particularly in North Americas forest industry which tends to be reactive in adopting sustainable practices. A survey of socially responsible investment mutual funds in Canada and the US was first undertaken in 2006 and then replicated in 2010–11 to understand the implications of this growing investment practice on the natural resources sector, with a focus on forestry. While we did not expect to find a convergence in environmental, social or governance criteria among funds, this study found that environmental criteria are most important to respondents in evaluating natural resource stocks, and that this is stable over time and consistent according to fund size. Governance criteria became prominent in 2010–11, perhaps a result of the Global Financial Crisis. These results build on literature examining the investment evaluation process for socially responsible mutual funds. What the findings highlight is that evaluation criteria are dynamic, responding to changing attitudes and firms should consider this in developing their sustainability agenda. Some socially responsible mutual funds have played a unique role in the forest sector, working collectively with Non-Government Organisations and civil actors to influence forest companies to improve sustainability, and have divested shares in forest companies that do not comply with their demands. Our results improve understanding for what is important to socially responsible mutual funds in evaluating the forest sector. The study shows a decline in importance for forest certification over the period and that the Forest Stewardship Council scheme is viewed as most credible by respondents. However, poor financial returns in the forest sector may constrain further attention from socially responsible mutual funds.

Putting Indigenous water rights to work: the Sustainable Livelihoods Framework as a lens for remote development

Sustainable development programs can lead to tension and conflict in human communities when natural capital is used as the foundation for livelihood programs. Building on the Sustainable Livelihoods Framework (SLF), this study demonstrates that including community perceptions in the creation of sustainable livelihoods programs is important in designing programs that are legitimate to community members, and this is especially important in the context of natural capital. Using the SLF, the allocation of water rights to Indigenous groups in remote northern Australia is examined to determine the acceptability of this form of natural capital to support sustainable livelihoods. The findings indicate that there are competing values of water within communities, and that balancing the preferences for spirituality and conservation with economic development and self-sufficiency is critical to the success of sustainable livelihoods programs across the region.

Barriers to indigenous enterprise development on communally owned land

This research focuses on understanding barriers to indigenous enterprise development (IED) on inalienable and communal land in the Northern Territory (NT) of Australia. A total of 56 face-to-face interviews were conducted with experts or opinion leaders on IED in the region. The barriers identified to IED in this context are: mistrust and conflict, socio-cultural norms and values, lack of human capital, the institutional framework, and economic and social constraints. These findings typically confirm those barriers to IED identified in the literature. However, this study illustrates that these barriers impact communal enterprise and smaller ventures in different ways. This research underscores that the processes and regulations for dealing with communal land, as well as risk averse government IED support programs, are found to limit adaptation and innovation in IED. But, the research illustrates that there are numerous barriers that must be addressed concurrently to improve IED outcomes in the region.

Trade-offs between dimensions of sustainability: exploratory evidence from family firms in rural tourism regions

ABSTRACT Family firms often pursue social and environmental sustainability, or corporate social responsibility (CSR) efforts that go beyond regulations. This is particularly true in nature-based industries. This study draws on socio-emotional wealth (SEW) and tourism literatures, as well as random utility theory, to disentangle the drivers of sustainability in rural tourism family firms (RTFFs). Informed by interviews, this study applied a novel choice-method survey, that brings understanding to the CSR payoffs and trade-offs between ecological, social and economic attributes in RTFFs. The results from 152 family firms in Western Austria show that after satisfying financial requirements, RTFFs are predominantly motivated by ecological and social considerations. The findings indicate that RTFFs obtain greater utility from positive ecological and social outcomes than additional financial profits, which the authors hypothesise is because of family-related SEW dynamics that enhances CSR. The findings from this study offer theoretical and practical insight into the motivations for proactive sustainability strategies among RTFFs.