Corporate Governance in Search of the Shareholder-Manager Balance of Power

Recent legislation intended to strengthen shareholder power over managers and the Board of Directors ("Board" or "Boards") through legislative measures such as say on pay, compensation clawbacks, and requiring Boards to submit themselves for re-election in the United States ("U.S."), United Kingdom ("U.K."), and Australia has led to the strengthening of blockholder (i.e. investment funds, hedge funds, etc.) power over managers and the rest of the shareholder body. At the same time, these developments also enable managers to act opportunistically and protect their interests by being more accommodating to the demands of blockholders. The formation of such alliances between managers and blockholders can negatively impact the rest of the shareholder body and should therefore be brought to account. This article examines the causes and consequences of these developments, and ways of addressing the resulting issues

Dispute settlement under free trade agreements: the proposed Australia-China free trade agreement

This article focuses on what would be an appropriate framework for dispute settlement to be adopted in the forthcoming Australia-China free trade agreement (ACFTA) currently being negotiated

Dumping and anti-dumping measures

The discussion in this chapter is structured as follows. Section 2 examines the definition of dumping and anti-dumping measures; Section 3 discusses the general WTO principles on dumping and anti-dumping; Section 4 articulates the rules and standards on determining dumping action; Section 5 examines issues relating to the determination of anti-dumping measures; Section 6 examines the WTO disputes on dumping and anti-dumping; and Section 7 concludes

The regulation of credit, market and operational risk management under the Basel Accords

Discusses the evolution of financial regulation under the Basel Committee on Banking Supervision. Considers the management of banking risk including credit, market and operational risk. Examines the evolution of the capital adequacy requirements under the Basel Accord and their impact on bank risk management. Reviews the Basel Accord's reliance on market discipline, disclosure and enhanced transparency as regulatory measures

Bank credit card charges and the interest free period : balancing equity and efficiency

Regulators have for some time been concerned about the high interest rates and charges levied by credit card system operators, as well as the shifting of the incidence of some of their costs by cross subsidizing parts of their operation. While Regulators have attempted to address the problem of crosssubsidies linked with the interchange fee, no serious attempt has been made to address the related issue of who pays for the interest free period enjoyed by some credit card users. This paper highlights the emergence of a curious form of upside down equity, whereby the poor (those unable to pay their debts within the interest free period and hence subject to interest charges and various penalties), are being made to subsidise the rich (those who pay in time and hence able to enjoy the interest free period). The paper recommends the adoption of a user pay system as a means of overcoming this upside down equity problem

International commercial letters of credit : balancing the rights of buyers and sellers in insolvency

Discusses the mechanisms by which international commercial letters of credit attempt to balance the rights of buyers and sellers in the event of insolvency. Reviews key features of international sales contracts, the information contained in letters of credit, the extent to which these constitute a payment guarantee and the problems arising from the current operation of the fraud exception, including its role in balancing the interests of the parties. Considers the reasons why the priority interests granted to third parties following seller insolvency are inappropriate and why the separate contracts negotiated by each party outside the primary contract should be seen as subordinate to the primary parties' claims against one another

Explaining securities markets efficiency

This article examines the claim of securities markets efficiency based on the efficient markets hypothesis (EMH), which Fama proclaimed to be a well substantiated truth in 1978. Behavioural theory (more particularly prospect theory) shows that individuals do not act to maximize their utility as asserted by neoclassical economists, while entrepreneurial theory explains share price movements to be the product of error prone guesswork by market participants. Alongside this, the emergence of the shareholder value concept in the late 1980s advocated by both corporate managers and outsider market makers has undermined the very foundations of share price efficiency. More importantly, the undermining seems to have been caused by forces exogenous to the firm. Nonetheless, securities markets are highly competitive. This article investigates this inherent paradox