The Governance of Corporate Sustainability: Empirical Insights into the Development, Leadership and Implementation of Responsible Business Strategy

This article explores how corporate governance processes and structures are being used in large Australian companies to develop, lead and implement corporate responsibility strategies. It presents an empirical analysis of the governance of sustainability in fifty large listed companies based on each company's disclosures in annual and sustainability reports. We find that significant progress is being made by large listed Australian companies towards integrating sustainability into core business operations. There is evidence of leadership structures being put in place to ensure that board and senior management are involved in sustainability strategy development and are then incentivised to monitor and ensure implementation of that strategy through financial rewards. There is evidence of a willingness to engage and communicate clearly the results of these strategies to interested stakeholders. Overall, there appears to be a developing acceptance amongst large corporations that efforts towards improved corporate sustainability are not only expected but are of value to the business. We suggest that this is evidence of a managerial shift away from an orthodox shareholder primacy understanding of the corporation towards a more enlightened shareholder value approach, often encompassing a stakeholder-orientated view of business strategy. However, strong underlying tensions remain due to the insistent market emphasis on shareholder value. © 2013 Springer Science+Business Media Dordrecht

Governance Challenges for Not-For-Profit Organisations: Empirical Evidence in Support of a Contingency Approach

This article presents empirical evidence of the governance challenges faced by Australian not-for-profit (NFP) organisations. There is a dearth of academic research in the not-for-profit sector on issues of governance. Using survey and interview data, we explore what NFP leaders believe are key governance challenges, and what this means for theory and practice of NFP governance. We demonstrate that the effectiveness of governance systems is influenced by internal and external contingencies that NFP organisations face, such as variations in board roles, stakeholder and membership demands, funding arrangements, board member recruitment processes, skills of board members, and resources for training and development. We argue for a shift of focus away from prescriptive and normative NFP governance models, and contend that generic best practice governance standards for NFPs ought not to be further pursued, and that a contingency approach is more promising

Stewardship Codes and the Role of Institutional Investors in Corporate Governance: An International Comparison and Typology

Over recent decades, share ownership of listed companies has concentrated into the hands of large institutional investors, challenging the traditional agency theory view of corporate governance as a mechanism to resolve the separation of ownership and control. Alternative theories have emerged to explain the role of institutional investors in corporate governance, each with a slightly different view on the motivations of these powerful shareholders and the nature of their relationship with corporate management. These theories share a common thread – the concept of investor stewardship – yet each theory applies it differently. This paper explores whether institutional investors should act primarily as stewards of their investee companies (agency theory), stewards of beneficiaries’ funds (agency capitalism), stewards of a market/economy (universal ownership) or stewards of society (stakeholder theory), and whether this varies internationally. Through an analysis of national stewardship codes, the paper determines which of these theoretical approaches are most strongly reflected in emerging stewardship policy across the world. It presents a typology of stewardship codes as a framework for understanding cross-country variation in investor stewardship policy. Stewardship codes influence the shareholder–manager relationship and can encourage integration of wider economic and societal concerns into corporate finance

Governance Challenges for Not-for-Profit Organisations: Empirical Evidence in Support of A Contingency Approach

ABSTRACT: This article presents evidence of the governance challenges faced by Australian not-for-profit (NFP) organisations. We find a key challenge for NFPs is recruiting individuals with appropriate skills, as directors are volunteers often elected by the membership and frequently lack relevant experience. Another issue is balancing the needs of a diverse constituency with competing demands. We find that the often proposed solution to this challenge – stakeholder representation on boards – can further hinder the recruitment of suitable directors and create tensions detrimental to board effectiveness. We argue to shift focus away from normative governance models towards a contingency approach and posit a role for a national NFP sector regulator in assisting to develop appropriate governance systems according to contextual factors