• Selected
• Entire List

Abstract:
This paper is part of a larger project that examines, by way of detailed case studies of companies, the interaction between several key factors in the creation and sustainability of Partnerships at Work. These factors include particular employment systems, forms of corporate governance and ownership structures. The project investigates how these various factors have interacted so as to give rise to - or fail to give rise to - high performance partnership-style relations at work.

The focus of this paper is on three core issues. We first examine the extent to which shareholder value has come to dominate debates around corporate governance and theories of the company. Secondly, we explore the extent to which the Australian corporate law framework offers clear support for shareholder value as a corporate governance norm or imperative. Thirdly, we examine the degree to which labour law provides a constraint on, or compels a modification of, the idea of shareholder primacy.

In relation to the first two of these issues, whereas we can clearly identify the consolidation of the shareholder value norm in contemporary corporate governance debates, our analysis leads us to the conclusion that some longstanding parts of corporate law provide only modest support for shareholder primacy. However, recent corporate governance reform strategies, such as those linking senior executive remuneration to share prices, and increasing reliance upon independent directors, are more closely linked to the pursuit of shareholder value than some of the more longstanding corporate law doctrines. Yet the impact of each of these reforms on corporate performance, and hence on the delivery of shareholder value, remains uncertain based on the results of empirical studies designed to test the outcomes of these reform strategies.

We also examine changes in corporate ownership, where, in the Australian context, the increasing ownership by institutional investors (which provides an incentive for active monitoring of the governance of the companies in which they invest) is in many cases counter-balanced by even larger non-institutional substantial shareholders (such as shareholdings of founding families or overseas companies), thereby reducing the prospects of successful institutional intervention. Patterns of institutional activism vary, depending on the size of the shareholding, the size of other non-institutional holdings in the company, the size of the company itself, the resources devoted to monitoring, the nature of the institution's portfolio and whether the institution is managing index funds. We note that institutional investors have, in recent years, increasingly argued for the types of corporate governance reforms which involve the pursuit of shareholder value.

In relation to the third issue, we argue that labour law, although not often a key focus of the research of corporate governance scholars, has always been able to be viewed as part of corporate governance to the extent to which it structures and limits what management can do in its relations with employees. However, current developments in Australian labour law are moving to a position whereby management's power to restructure the enterprise for shareholder value is being subjected to fewer constraints, with a corresponding shift of risk to employees.

Corporate law, corporate governance, labour law

Abstract:
This research report provides detailed analysis of data collected from a major survey into how company directors balance the competing and sometimes conflicting interests of stakeholder groups, including employees, creditors and shareholders. The findings have significant policy implications. The obligations of directors toward company stakeholders and whether the law of directors' duties needs to be changed have been the subject of much public debate. There have been government inquiries on this topic in a number of countries. However, there has been little empirical evidence of directors' attitudes and business practice.

The survey tested directors' understanding of their obligations under the law and their priorities in relation to stakeholders using simple ranking exercises and a more sophisticated 'salience' test in order to gain a more nuanced understanding of the extent to which directors prioritise particular interests. The survey revealed results which suggest that directors do not adhere to a simple 'shareholder primacy' corporate strategy.

Abstract:
Employee share ownership (ESO) has been the subject of significant public policy debate. In these debates, ESO plans are usually said to be implemented for a variety of reasons including alignment of employer and employee interests, increased employee productivity, improved workplace harmony, and increased employee remuneration. This study explores, through case studies of ESO plans at two Australian companies, three key issues relevant to the implementation of ESO plans and the policy and regulation applicable to ESO plans. These issues are: (1) whether ESO plans better align the interests of employees with those of their employer, leading to better enterprise performance; (2) whether the objectives of companies in implementing ESO plans are primarily "ownership objectives," "remuneration objectives" or "workplace change objectives;" and (3) whether the concessional taxation treatment of ESO plans provides an incentive for the implementation of plans in a way that leads to improved enterprise performance.

employee share ownership, corporate governance

Abstract:
Employee share ownership ("ESO") schemes have recently been the subject of public policy interest in Australia. Employees owning shares in the company for which they work potentially has a number of ramifications, not least of which is the prospect that these schemes might circumvent the problematic of employees as "outsiders" in corporate governance.

This paper surveys key issues and themes surrounding ESO schemes in Australia. It explores the varied policy rationales for these schemes, noting both broad bipartisan support and a generally limited conception of their fundamental purpose. The paper also outlines the current state of empirical research on their incidence and effects. It is suggested that available information on ESO schemes is patchy and there is no clear picture of Australian practices. In light of an overview of the present regulation of ESO schemes, the paper concludes by highlighting further research questions.

employee, share, ownership, ESO

Abstract:
An important debate in corporate governance concerns the validity of the shareholder primacy theory, a theory which depicts the role of company directors as primarily being to act in the interests of shareholders and maximize the wealth of shareholders. This paper reports the results of a survey of company directors that had, among its objectives, testing the validity of the shareholder primacy theory.

The authors present the survey findings on four questions: 1. whether directors prioritize the interests of shareholders above the interests of employees and other stakeholders; 2. whether, if that is the case, the source of that prioritisation lies in legal obligation or duty; 3. whether directors in types of companies corresponding to the market/outsider model are more inclined to prioritize shareholder interests (the authors test two models derived from the work of others - the market/outsider model and the insider/relational model where the market/outsider model is based upon indicators such as the company being listed and higher levels of shareholdings by institutional investors); and 4. whether the prioritisation of shareholder interests tends to come at the expense of employees.

The key conclusions of the authors include: 1. The shareholder primacy view of directors' priorities has considerable cogency but the results of the survey indicate that this cannot be reduced to a simple proposition that directors will necessarily pursue shareholders' interests at the expense of other stakeholders. There is very little evidence, for example, that directors see short term returns to shareholders through share price or other short term gains as a priority. Clearly, though, shareholders are seen as important and, probably, the most important, of stakeholders. 2. How this prioritisation plays out in directors' minds, however, is far from clear cut. It evidently does not follow that other stakeholders are not prioritised or that their interests are not attended to or seen as legitimate. Other evidence derived from the survey results indicates that employees, for example, are also ranked highly in these respects and sometimes ranked more highly than shareholders. 3. Whatever the normative strength of the shareholder primacy view, shareholder primacy is not derived from a legal obligation on the part of directors, nor is it derived from a view by directors that they are under an obligation to pursue such a policy. Directors indicate that they are legally free to pursue any strategy which they feel will benefit all stakeholders.

Abstract:
This paper presents an analysis of the inter-relationship between employment promotion policies in Australia and labour law. Surveying recent trends in policy, it identifies the role that law has played in employment promotion in the past twenty years. It then examines the relationship between these recent developments and labour law's 'traditional' function of protecting people at work. The paper argues that both historically and currently Australian labour law has not been restricted to this 'traditional' function but has also been a part of overall economic policy regulating labour markets. The tension between 'protection' and wider economic imperatives represents the contested terrain of Australian labour law. The paper concludes by suggesting that the new challenge for labour law is to open up the discipline to include consideration of those wider laws that impact on people who are reliant upon their labour for a living, regardless of their position in the labour market.

employment, protection, promotion, Australia, labour law, contested

Abstract:
Since at least the 1970s, employee share ownership has enjoyed bipartisan political support in Australia. Despite broad and sustained public policy interest in employee share ownership, however, Australian literature on the subject remains scarce. There has also been very little in the way of comprehensive analysis of the regulatory framework. This paper provides an overview of employee share ownership from an Australian perspective. It begins by reviewing the literature on broad-based employee share ownership before turning to examine available data on Australian practice. It then considers how employee share ownership plans are currently provided for in public policy and law. Companies in Australia proposing to offer shares to employees must comply with many regulatory requirements. The paper examines these requirements. The authors also examine features of the current regulatory framework which have been identified as problematic.

Abstract:
Non-executive employees are increasingly being offered the opportunity to participate in employee share ownership plans. In many cases, companies provide their employees with shares or options as a 'gift', either on a one-off or regular basis. Many plans, however, are structured so as to require employees to contribute to the value of the securities. In the cases of contributory plans, the reasons why employees choose to participate are not always clear. This paper reviews existing studies and presents a conceptual framework to explain why employees participate in employee share plans. It examines the relationship between the decision to participate in a plan and a number of demographic and workplace-specific variables. It also identifies key factors that may moderate this relationship, such as the extent of company communication on the plan and company performance. This conceptual framework has been developed on the basis of a synthesis of previous studies and twelve semi-structured interviews conducted with human resource managers and trade union representatives within publicly listed companies.

Abstract:
This article argues that the interaction between Australian Workplace Agreements and external regulatory instruments (including the contract of employment, awards and company policies) creates significant complexity and uncertainty in the legal regulation of the employment relationship. It investigates how these complex interactions between regulatory instruments may have the effect of impeding the legal ability of employers to pursue workplace flexibility. Although the focus of the article is upon Australian Workplace Agreements, the issues canvassed apply equally to other regulatory instruments.

Australian Workplace Agreements, workplace regulation, employment

Abstract:
This research report contains the findings of 10 case studies of Australian companies undertaken as part of a project to better understand the relationships between corporate structure, corporate governance and labour relations.

We first sought to assess each of our case study companies according to whether it could be categorised as an 'insider' controlled company or as an 'outsider' controlled company. Second, we sought to examine in each of our case studies the extent to which enterprise employment systems could be said to 'complement' the style of corporate governance within the organisation in accordance with the suppositions of the comparative capitalisms literature. Third, because we were particularly interested in the quality of employment systems (beyond their mere conformity with insider/outsider styles) we identified more specifically what we thought could be said to properly characterise 'partnership' style relations at the business enterprise level.

We investigated whether the case study companies reflect a recent pattern of development which links changes in ownership structure with a more market-oriented, shareholder-oriented, form of corporate governance accompanied by adverse or negative outcomes for employees.

In most of our studies, in the time period under review, ownership change or capital reorganisation occurred which could be said to have exposed the companies to greater 'market' or 'outsider' pressure. In our studies we attempted to examine empirically how employment systems were readjusted in each case to deal with the greater market exposure to which most of our companies were subjected. We also investigated the role of regulation in influencing these outcomes.

corporate governance, labour relations

Abstract:
This research report presents findings from a survey of employee share ownership practice in Australian listed companies. The research focused on broad-based employee share ownership plans (ESOPs): that is, plans that are open to a majority of employees within the company. The purpose of this study was fourfold: (1) to inform public policy debate on the issue of employee share ownership through providing, for the first time, a detailed account of employee share plan practice in Australian listed companies; (2) to examine how, if at all, the regulatory framework in taxation and corporate law is impacting upon the decision by companies to implement ESOPs and the design of their plans; (3) to obtain company views on the adequacy of the current regulatory framework; and (4) to test a range of hypotheses as to the determinants of ESOPs in the Australian context.

Key findings as to company practice include: (1) approximately 57 percent of companies responding to the survey had at least one broad-based employee share ownership plan; (2) significantly more companies reported having a broad-based plan than a narrow-based plan: that is, a plan that is only open to executives; (3) the three most popular reasons for implementing a plan were 'showing employees the company values them'; 'sharing financial success with employees'; and 'aligning employee interests with shareholder interests'; (4) over three quarters of companies that have a broad-based plan have adopted their plan since 2000; (5) the most common type of broad-based ESOP was a plan structured to take advantage of the tax exemption in Division 13A of the Income Tax Assessment Act.

Three structural characteristics were found to have a significant and positive association with the presence of an employee share ownership plan. These were the presence of a centralised human resource function; company growth over the preceding 12 months (measured by the number of employees); and the composition of the workforce (the proportion of full-time to part-time and casual employees). We also found that companies with broad-based ESOPs were significantly more likely to have structures for communicating directly with employees.

Abstract:
An important dimension of this broader concept of innovation is 'workplace innovation'. One form of workplace innovation is the adoption of 'high performance' or 'high involvement' approaches within firms, such as work teams, multi-skilling and employee involvement schemes. In this paper, we are interested in exploring the idea of workplace innovation in a more expansive sense - that is, in terms of the ordering of work organisation, production and industrial relations systems in ways that support other forms of innovation. Several studies have identified a positive link between innovation at the workplace level, and innovation in products, markets and technologies (and so on). This, in turn, is said to carry significant benefits in terms of business productivity and performance. The core question that we wish to examine in this paper (and in the broader project that it forms part of) is the potential role of regulation in supporting and advancing workplace
innovation.

workplace innovation, employment systems, regulation

Abstract:
The Prime Minister's recent statement outlining the Coalition Government's plans for industrial relations heralds a period of profound change in Australian labour regulation. Proposed alterations to the institutional landscape for regulation of wages and other minimum standards, including a diminishing of the role of the AIRC and further promotion of enterprise bargaining, represent a major regulatory shift and are likely to have a significant impact on working conditions and trade unions. The exclusion of businesses with 100 employees or less from the federal unfair dismissal regime will mean that statutory regulation of termination of employment is substantially reduced. And the Prime Minister's plan for a national industrial relations system is the most radical restructuring of federal labour regulation in almost a century. The changes, however, do not represent a wholesale replacement of the collective system with institutionalised individualism. Among other things, key institutions of the conciliation and arbitration system will remain in place, although it will be some time before we can fully assess the nature and likely impact of the Government's policy.

industrial relations, reform, coalition, labour, regulation, Australia, arbitration

Abstract:
This article examines the operation of the 'no disadvantage test' (NDT) as it applies to the approval or certification of certain forms of agreements under the Workplace Relations Act 1996 (Cwlth). The purpose is to make an assessment of the effectiveness of the test in meeting the supposed statutory intention that workers would not be made worse-off as a result of entering into agreements which derogated from award and other legally prescribed conditions of employment. The article reports on research which applied the NDT in detail to 36 agreements, and, more partially, to a further 48 agreements. The general conclusion arrived at, though heavily qualified, was that in certain defined respects, the NDT, as presently constructed and applied, is failing adequately to protect employees from a deterioration in their terms and conditions of employment.

Abstract:
In the face of declining prominence and influence under industrial relations laws regulating Australian workplaces, Australian trade unions appear increasingly to be directing their attention to Corporations Law as a mechanism for pursuing union and employee "voice" within corporate business organisation. This paper undertakes an examination of four recent "union shareholder" campaigns, the circumstances in which they were undertaken, the objectives of the "union shareholder" strategies and the outcomes of the campaigns. The paper also opens up for consideration whether union shareholder activism is merely a new strategy for pursuing conventional industrial aims, or whether it potentially represents a move by unions to identify themselves as "insiders" with a dual interest in the profitability and governance of the corporation as both shareholders and stakeholders.

Abstract:
This paper undertakes an examination of the espoused commitment to CSR principles and its relationship with the labour management systems in two Australian mining companies. The paper explores the extent to which the adoption of a CSR strategy has affected the management of labour in three respects: "collective" relations with unions; "partnership-style" relations with unions and workers; and the adoption of HPWS measures. The paper concludes that while each company has made substantial "in principle" commitments as a result of CSR, there is nothing to suggest that CSR considerations are sufficiently powerful in themselves to bring about systemic change in the management of labour.

Abstract:
The Varieties of Capitalism approach begins from the premise that economic and business systems are organized in different ways in different countries. These systems include liberal market economies and co-ordinated market economies. The literature comparing types or 'varieties' of capitalist economies has much to say about corporate governance and employment systems. While the varieties of capitalism debate generally ranges across a broad spectrum of different questions and topics, the issues of corporate governance and labour management, and the relationship between them, appear crucial in how different systems are characterised and typified.

Can it be said that Australia's industrial relations and corporate governance systems - two institutions which influence the variety of capitalism of a national economy - now belong more clearly in a group with the US and the UK rather than with other OECD countries such as Germany, Sweden or Japan? While this is often assumed to be the case, very little work has been conducted which systematically investigates Australian evidence. This book brings together contributions by leading Australian academics in the area, which together provide the most systematic response to the question to date.

The authors examine the question from a number of different perspectives, drawing on a range of academic disciplines. The book brings together corporate law and labour law scholars, comparative employment relations and human resource management academics and political economists. Some of the chapters are concerned with changes to corporate ownership or financing; tracking any associated shifts in corporate priorities. They consider the impact of corporate ownership and corporate governance on workplace practices and attitudes. They also examine the implications for employment practices of the increasing prominence of institutional investors, such as mutual funds and superannuation funds, as owners of Australian companies.

Other contributions examine the issue of where Australia fits on the international spectrum of varieties of capitalism from an employment relations perspective. Labour law scholars map the effects which the Australian government's labour law changes over the last decade have brought about concerning partnership relations between employers and employees, and compare these labour law changes with recent pro-partnership reforms in the UK. Industrial relations specialists examine whether the Australian variety of capitalism acts as an impediment to the co-operative implementation of innovative work systems in Australian workplaces.