The Changing Roles and Responsibilities of Company Boards and Directors

Interim Report released 6 June 2006 (Download Report. (560Kb PDF))

Project Summary

This is a joint project funded by the Australian Research Council together with Dibbs Abbott Stillman lawyers, designed to survey best practice corporate governance in Australia and compare this with international practice in the UK, USA and other countries.

It is clearly necessary to move beyond the compliance culture in corporate governance and discover what is working well in practice. Therefore, although this work does parallel the surveys of the ASX Corporate Governance Council, the focus of the project is very much on changes in thinking and behaviour rather than compliance. The aim of the research is to discover how corporate governance might add value to companies, both in terms of accountability and performance.

The project will examine the changing roles and responsibilities of company boards and directors, in the wake of CLERP 9, the new ASX corporate governance principles, and other recent best-practice guidelines in Australia. These guidelines themselves stemmed from widespread government, investor and public concerns regarding standards of accountability, disclosure and performance. Evidence from a survey conducted by Chartered Secretaries Australia in 2004 suggests a compliance mode continues to prevail in Australia. What this research seeks to explore is which aspects of corporate governance are working in practice.

There will be three levels of analysis:

  1. changes in values and beliefs among company boards and directors regarding corporate governance;
  2. changes in structures and procedures;
  3. changes in practices and behaviour;

This will enable comparison with the adoption of corporate governance reforms internationally. The research will be conducted over the period 2005-2006 and represent the most in-depth analysis of corporate governance practice yet completed in Australia.

Project Objectives

This research will assess the experience of 100 Australian corporations responding to the challenge of transforming their corporate governance to meet changing expectations, with particular reference to the development of their boards and directors enhanced role and responsibilities. The specific aims of the research are:

  1. To monitor and record the changes in board and director structures and practices made in response to the new corporate governance initiatives.
  2. To offer a comparative analysis of the different company experiences of the effort to improve their corporate governance structures and processes.
  3. To provide a survey of best practice in Australia, relating this to industry and firm characteristics.
  4. To better understand the detail of corporate governance structures and behaviour in Australian companies.
  5. To make comparisons with developments in international corporate governance standards and practices.
  6. To contribute to the research and development of theory in corporate governance with reference to boards and directors roles and responsibilities, objectives, and measures of performance.

The research project design has benefited considerably from the assistance of a group of executives and professionals directly involved in corporate governance. We hope to continue to seek their guidance as the research develops.


Research Sample

The research sample is designed to demonstrate the changing challenges, practices and significance of corporate governance in companies from their first formation, through listing and growth, into large and mature corporations. In this way the life-cycle of companies will be related to the developments in their governance structures and processes. The aim is to include:


Participation

Participation in the project involves company secretaries or directors meeting with us in order to run through a series of questions intended to explore their company's corporate governance practices. The focus is on changes in thinking and behaviour rather than on compliance.

Following the interview, participants will receive copies of the interim and final reports of the research and will be invited to the meetings and/or workshops which review the research and its findings. We hope to throw some light on how companies are coping with the developments of the last few years and whether they feel they are benefiting from the new regulatory regime.

The interim report was released on 6 June 2006 and describes our preliminary findings from the first 24 participating companies. Download Report. (560Kb PDF)

If you are interested in participating in the project please contact either:
Professor Thomas Clarke, Director of the Centre (t.clarke@uts.edu.au)
or
Alice Bunker, Research Associate (alice.bunker@uts.edu.au).