Search

This thesis consists of four essays on Corporate Environmental Performance (CEP) and its impact on Corporate Financial Performance (CFP). The first essay is entitled “Emission Indices for Hazardous Substances: An Alternative Measure of Corporate Environmental Performance”. This essay reviewed significant interdisciplinary research and concluded that firm chemical release/emission can be used as a proxy for a firm measure of environmental performance. It also proposed that due to the variety of chemicals and different levels of toxicity, a risk factor should be calculated for all chemicals on the basis of human health risk, environment risk and risk of exposure. Once a single risk factor is calculated for each chemical, then it should be multiplied by the level of each company chemical release that is reported to National Pollutant Inventory in order to calculate the weighted average risk factor for each company. Thus, the weighted average risk is a robust measure having the combined effect of level of toxicity and volume of chemical emissions. Once the environmental performance index is formulated, the second essay investigated the nature of the relationship between environmental performance and financial performance of publicly listed companies in Australia. The second essay provided evidence that the nature of the relationship between environmental performance and financial performance is positive. Further, this study divided the sample into a period of economic growth (2001-2007) and a period of economic contraction (2008-2010). The multivariate regression estimation shows a positive relation between CEP and CFP in the period of economic growth but during the extra ordinary circumstances like the financial crisis this relationship is insignificant. This research is of great relevance for managers, academics and society at large. The third essay investigates the relationship between Corporate Environmental Performance (CEP) and financial risk for Australian listed

This thesis consists of four essays on Corporate Environmental Performance (CEP) and its impact on Corporate Financial Performance (CFP). The first essay is entitled “Emission Indices for Hazardous Substances: An Alternative Measure of Corporate Environmental Performance”. This essay reviewed significant interdisciplinary research and concluded that firm chemical release/emission can be used as a proxy for a firm measure of environmental performance. It also proposed that due to the variety of chemicals and different levels of toxicity, a risk factor should be calculated for all chemicals on the basis of human health risk, environment risk and risk of exposure. Once a single risk factor is calculated for each chemical, then it should be multiplied by the level of each company chemical release that is reported to National Pollutant Inventory in order to calculate the weighted average risk factor for each company. Thus, the weighted average risk is a robust measure having the combined effect of level of toxicity and volume of chemical emissions. Once the environmental performance index is formulated, the second essay investigated the nature of the relationship between environmental performance and financial performance of publicly listed companies in Australia. The second essay provided evidence that the nature of the relationship between environmental performance and financial performance is positive. Further, this study divided the sample into a period of economic growth (2001-2007) and a period of economic contraction (2008-2010). The multivariate regression estimation shows a positive relation between CEP and CFP in the period of economic growth but during the extra ordinary circumstances like the financial crisis this relationship is insignificant. This research is of great relevance for managers, academics and society at large. The third essay investigates the relationship between Corporate Environmental Performance (CEP) and financial risk for Australian listed

The purpose of this interpretative phenomenological study was to explore directors’ lived experience of ethics in their task of corporate governance so as to capture some of the multiple facets of this phenomenon: specifically how directors understand the role of ethics in their task of corporate governance and how they understand and practise ethics. The focus of the investigation was the role and relative importance of directors’ personal ethics as opposed to corporate governance rules or regulations and to what extent their understanding and practise of ethics as such, resembled Kantian ethics, utilitarianism and Aristotelian virtue theory (AVT). Such issues have implications primarily for the influence of leaders’ personal ethics in the context of corporate governance failure and whether AVT in particular can contribute to the achievement of best-practice governance. AVT differs from the other two ethical theories because it focuses on the importance of a good character for the making and carrying out of sound ethical judgments. It assumes that human nature contains the seeds of ethics and that a good character can develop over time with the help of role models and experience. The study also discusses the subjective aspects of the ethical experience and the debate about the relationship between descriptive and philosophical branches of business ethics. The researcher chose to take an interpretive phenomenological approach using an AVT conceptual framework. The focus of the inquiry was what the individual’s narratives imply about what he or she experiences every day. This allowed the researcher to go further by interpreting the meanings for the purposes of practice and research. The use of the AVT conceptual framework facilitated the examination of the relevance of philosophical ethics for business practice in general and in particular to investigate the relevance of AVT as opposed to the two other ethical theories. Semi-structured interviews were conducted with

This thesis examines the impact of corporate governance practices on the short and longer-term sustainable returns of initial public offerings (IPOs) in China and New Zealand. In particular, the analysis focuses on the Shanghai, Shenzhen and New Zealand exchanges, providing a comparison between them. The closer trade and economic relations between China and New Zealand and the increasing immigration to New Zealand of relatively well-off Chinese makes the study topical. Different political and cultural settings may give rise to differing relationships between IPO success and governance in these three markets and this will promote some interesting implications. Corporate governance involves regulatory and market mechanisms, and the roles and relationships between a company’s management, its board, its shareholders and other stakeholders. IPOs are very important for investors, stock markets and economic growth. The relationship between corporate governance mechanisms and IPO performance has received attention in studied by the literature. The bulk of prior research focuses on larger and more developed economies. There is an increasing volume of literature relating to Chinese IPOs but none have focused on this key issue of IPO performance and the corporate governance structures of the particular companies. New Zealand by comparison to China is a small economy, small population and has few IPOs. However, China has become New Zealand’s second largest trading partner since 2008 and China became one of the major sources of immigrants to New Zealand from late 1990s. This thesis makes an important contribution to knowledge demonstrating that the short-term IPO performance is associated with different corporate governance attributes to those apparent for long-term performance of IPOs. The use of a wide range of governance variables for the analysis as compared with prior studies provides greater confidence in the findings. The longer time period, up to 11 years, used in this s

This thesis examines the impact of corporate governance practices on the short and longer-term sustainable returns of initial public offerings (IPOs) in China and New Zealand. In particular, the analysis focuses on the Shanghai, Shenzhen and New Zealand exchanges, providing a comparison between them. The closer trade and economic relations between China and New Zealand and the increasing immigration to New Zealand of relatively well-off Chinese makes the study topical. Different political and cultural settings may give rise to differing relationships between IPO success and governance in these three markets and this will promote some interesting implications. Corporate governance involves regulatory and market mechanisms, and the roles and relationships between a company’s management, its board, its shareholders and other stakeholders. IPOs are very important for investors, stock markets and economic growth. The relationship between corporate governance mechanisms and IPO performance has received attention in studied by the literature. The bulk of prior research focuses on larger and more developed economies. There is an increasing volume of literature relating to Chinese IPOs but none have focused on this key issue of IPO performance and the corporate governance structures of the particular companies. New Zealand by comparison to China is a small economy, small population and has few IPOs. However, China has become New Zealand’s second largest trading partner since 2008 and China became one of the major sources of immigrants to New Zealand from late 1990s. This thesis makes an important contribution to knowledge demonstrating that the short-term IPO performance is associated with different corporate governance attributes to those apparent for long-term performance of IPOs. The use of a wide range of governance variables for the analysis as compared with prior studies provides greater confidence in the findings. The longer time period, up to 11 years, used in this s

The purpose of this interpretative phenomenological study was to explore directors’ lived experience of ethics in their task of corporate governance so as to capture some of the multiple facets of this phenomenon: specifically how directors understand the role of ethics in their task of corporate governance and how they understand and practise ethics. The focus of the investigation was the role and relative importance of directors’ personal ethics as opposed to corporate governance rules or regulations and to what extent their understanding and practise of ethics as such, resembled Kantian ethics, utilitarianism and Aristotelian virtue theory (AVT). Such issues have implications primarily for the influence of leaders’ personal ethics in the context of corporate governance failure and whether AVT in particular can contribute to the achievement of best-practice governance. AVT differs from the other two ethical theories because it focuses on the importance of a good character for the making and carrying out of sound ethical judgments. It assumes that human nature contains the seeds of ethics and that a good character can develop over time with the help of role models and experience. The study also discusses the subjective aspects of the ethical experience and the debate about the relationship between descriptive and philosophical branches of business ethics. The researcher chose to take an interpretive phenomenological approach using an AVT conceptual framework. The focus of the inquiry was what the individual’s narratives imply about what he or she experiences every day. This allowed the researcher to go further by interpreting the meanings for the purposes of practice and research. The use of the AVT conceptual framework facilitated the examination of the relevance of philosophical ethics for business practice in general and in particular to investigate the relevance of AVT as opposed to the two other ethical theories. Semi-structured interviews were conducted with

This thesis investigates the effect of corporate governance practices have on the financial performance and agency costs of multinational subsidiaries and local public companies in Sri Lanka. In particular, this study examines (i) the relationship between corporate governance mechanisms of Sri Lankan listed companies, financial performance, principal-agent and principal-principal agency costs (ii) corporate governance practices and compliance differences of multinational company subsidiaries (MNCs) and local public companies (LPCs) in Sri Lanka, (iii) whether voluntary compliance with the new corporate code had an effect on firm financial performance and agency costs and (iv) corporate governance and firm financial performance differences across quantiles of performance proxies in MNCs and LPCs. Corporate governance has become a major issue since the collapse of major companies around the world. Additionally, the Asian financial crisis in 1997 showed the need for legislative reforms to strengthen corporate governance practices in that region. Now, it is widely believed that good corporate governance is an important factor in improving firm financial performance in both developed and developing financial markets. Until the mid-1990s, corporate governance was popularly known in Sri Lanka as, the systems used to control and direct companies. A real effort to codify the principle of corporate governance in a structured manner in Sri Lanka was made in 1996. Since the financial year commencing April 2008, Sri Lankan listed firms have been subject to mandated rules on corporate governance by the Securities and Exchange Commission of Sri Lanka. The main purpose of this new mandatory corporate governance rule is promoting accountability, transparency and overall efficiency in corporate governance best practice. This thesis makes a number of contributions to corporate governance and firm financial performance knowledge in several ways. First, it provides evidence of the relat

This thesis investigates the effect of corporate governance practices have on the financial performance and agency costs of multinational subsidiaries and local public companies in Sri Lanka. In particular, this study examines (i) the relationship between corporate governance mechanisms of Sri Lankan listed companies, financial performance, principal-agent and principal-principal agency costs (ii) corporate governance practices and compliance differences of multinational company subsidiaries (MNCs) and local public companies (LPCs) in Sri Lanka, (iii) whether voluntary compliance with the new corporate code had an effect on firm financial performance and agency costs and (iv) corporate governance and firm financial performance differences across quantiles of performance proxies in MNCs and LPCs. Corporate governance has become a major issue since the collapse of major companies around the world. Additionally, the Asian financial crisis in 1997 showed the need for legislative reforms to strengthen corporate governance practices in that region. Now, it is widely believed that good corporate governance is an important factor in improving firm financial performance in both developed and developing financial markets. Until the mid-1990s, corporate governance was popularly known in Sri Lanka as, the systems used to control and direct companies. A real effort to codify the principle of corporate governance in a structured manner in Sri Lanka was made in 1996. Since the financial year commencing April 2008, Sri Lankan listed firms have been subject to mandated rules on corporate governance by the Securities and Exchange Commission of Sri Lanka. The main purpose of this new mandatory corporate governance rule is promoting accountability, transparency and overall efficiency in corporate governance best practice. This thesis makes a number of contributions to corporate governance and firm financial performance knowledge in several ways. First, it provides evidence of the relat

This thesis examines commercial banks’ practice pertaining to the integration of environmental issues into their lending activities. There is evidence that over the last few decades some banks have considered the environmental impact of borrower activities as part of credit risk assessment and management. A number of academic surveys have identified a positive correlation between the environmental and financial performance of companies. These developments influence the level of bank support for responsible environmental management. For most commercial banks loans are a large percentage of assets. Hence appropriate management of loans is a priority for bank management, shareholders and other interested people. Traditionally, banks use financial instruments to measure the efficiency of their lending decisions and to ensure that payments are made on time. However, each lending operation may involve environmental risks. Adverse environmental outcomes may result in a reduction in the borrowers’ repayment capacity, a decline in the value of the collateral, a direct bank liability for environmental damage caused by its borrowing clients and potential risks to the bank’s reputation. For each of these risks the bank can determine the likelihood, extent, cost and impact should the damage actually occur. Bank lending occurs in a wider economic and social context of strategic importance for banks. Society’s quest for sustainable development involves the creation of new financing markets, such as markets for sustainable energy, water purification equipment, products for the financing of companies’ climate policies and groundbreaking technology. Banks can fulfil the role of a traditional financial intermediary or can step into this growing market to develop specific new products such as environmental loans. This market is rich in challenges and opportunities. Hence, it is crucial that banks have appropriate indicators to help them and stakeholders monitor performance. Against thi

The thesis proposes a normative model for strategic planning using stakeholder theory as the primary theoretical framework. Development of the normative model is achieved by analysis of the literature and corroborative engagement with local government practitioners. Strategic planning processes in public sector agencies involve many challenges; the processes are directed by government but influenced by many stakeholders who have an interest in the outcomes. Effective management of the strategic planning process suggests it is important for organisations to identify how stakeholders use their status and position to influence the process and final decision. Organisations can then apply the appropriate processes to manage stakeholders‘ interests and expectations to improve the quality of information used to inform decision making and to improve accountability and transparency of decision making. A review of stakeholder theory identifies the fundamental requirements for effective stakeholder management. A further comprehensive review and analysis of the literature from sustainable development and strategic management allows a normative model for decision making to be developed based on those perspectives1. The model is then used to specify criteria for a targeted assessment of New Zealand government documentation and local authorities‘ statements and processes. 1 A model can be viewed as a likeness of something ((Frankfort-Nachmias & Nachmias, 1997). Frankfort-Nachmias and Nachmias go on to say that models are used to gain insight into phenomena that the scientist cannot observe directly. Hardina (2002) describes models as constructs used to understand or visualize patterns of relationships among concepts, individual, groups and organisations. In this case the final normative model is made up of literature and practitioner perspectives of reality. A Normative Model for Strategic Planning The scope and boundaries of the thesis are established through an initial

This thesis develops a Decision Support System (DSS) to improve biosecurity response decisions affecting indigenous biodiversity. The key elements of the DSS are a synthesis of three components of non-market valuation: choice modelling, a systematic database of values and benefit transfer, with risk simulation to account for uncertainty. The innovative framework is demonstrated in a manual developed for Biosecurity New Zealand analysts for use during the early days of an incursion when time is severely constrained and uncertainty abounds. Theoretical approaches to decision making for environmental resource allocation decisions are reviewed with particular reference to decision support tools including non-market valuation, stated preference techniques, database development and benefit transfer. More complex and time consuming tools such as deliberative support and mediated modelling are also discussed. A framework is developed to quantify biodiversity values for use in Cost Benefit Analysis (CBA). The framework incorporates advanced choice modelling techniques demonstrated through four case studies, a systematic database of biodiversity values and transfer of these values using univariate benefit transfer with theoretical adjustment. The uncertainty in the values captured in the panel version of the Random Parameters Logit (RPL) model is integrated into CBA using risk simulation which utilises the means, standard deviations and correlation coefficients of risky variables to quantify the probability of achieving a positive Net Present Value of different response options. The DSS developed in this thesis has wider application in routine management of pests and diseases and in other resource allocation decisions by public agencies which impact on indigenous biodiversity.

The thesis proposes a normative model for strategic planning using stakeholder theory as the primary theoretical framework. Development of the normative model is achieved by analysis of the literature and corroborative engagement with local government practitioners. Strategic planning processes in public sector agencies involve many challenges; the processes are directed by government but influenced by many stakeholders who have an interest in the outcomes. Effective management of the strategic planning process suggests it is important for organisations to identify how stakeholders use their status and position to influence the process and final decision. Organisations can then apply the appropriate processes to manage stakeholders‘ interests and expectations to improve the quality of information used to inform decision making and to improve accountability and transparency of decision making. A review of stakeholder theory identifies the fundamental requirements for effective stakeholder management. A further comprehensive review and analysis of the literature from sustainable development and strategic management allows a normative model for decision making to be developed based on those perspectives1. The model is then used to specify criteria for a targeted assessment of New Zealand government documentation and local authorities‘ statements and processes. 1 A model can be viewed as a likeness of something ((Frankfort-Nachmias & Nachmias, 1997). Frankfort-Nachmias and Nachmias go on to say that models are used to gain insight into phenomena that the scientist cannot observe directly. Hardina (2002) describes models as constructs used to understand or visualize patterns of relationships among concepts, individual, groups and organisations. In this case the final normative model is made up of literature and practitioner perspectives of reality. A Normative Model for Strategic Planning The scope and boundaries of the thesis are established through an initial

This thesis examines commercial banks’ practice pertaining to the integration of environmental issues into their lending activities. There is evidence that over the last few decades some banks have considered the environmental impact of borrower activities as part of credit risk assessment and management. A number of academic surveys have identified a positive correlation between the environmental and financial performance of companies. These developments influence the level of bank support for responsible environmental management. For most commercial banks loans are a large percentage of assets. Hence appropriate management of loans is a priority for bank management, shareholders and other interested people. Traditionally, banks use financial instruments to measure the efficiency of their lending decisions and to ensure that payments are made on time. However, each lending operation may involve environmental risks. Adverse environmental outcomes may result in a reduction in the borrowers’ repayment capacity, a decline in the value of the collateral, a direct bank liability for environmental damage caused by its borrowing clients and potential risks to the bank’s reputation. For each of these risks the bank can determine the likelihood, extent, cost and impact should the damage actually occur. Bank lending occurs in a wider economic and social context of strategic importance for banks. Society’s quest for sustainable development involves the creation of new financing markets, such as markets for sustainable energy, water purification equipment, products for the financing of companies’ climate policies and groundbreaking technology. Banks can fulfil the role of a traditional financial intermediary or can step into this growing market to develop specific new products such as environmental loans. This market is rich in challenges and opportunities. Hence, it is crucial that banks have appropriate indicators to help them and stakeholders monitor performance. Against thi

This thesis develops a Decision Support System (DSS) to improve biosecurity response decisions affecting indigenous biodiversity. The key elements of the DSS are a synthesis of three components of non-market valuation: choice modelling, a systematic database of values and benefit transfer, with risk simulation to account for uncertainty. The innovative framework is demonstrated in a manual developed for Biosecurity New Zealand analysts for use during the early days of an incursion when time is severely constrained and uncertainty abounds. Theoretical approaches to decision making for environmental resource allocation decisions are reviewed with particular reference to decision support tools including non-market valuation, stated preference techniques, database development and benefit transfer. More complex and time consuming tools such as deliberative support and mediated modelling are also discussed. A framework is developed to quantify biodiversity values for use in Cost Benefit Analysis (CBA). The framework incorporates advanced choice modelling techniques demonstrated through four case studies, a systematic database of biodiversity values and transfer of these values using univariate benefit transfer with theoretical adjustment. The uncertainty in the values captured in the panel version of the Random Parameters Logit (RPL) model is integrated into CBA using risk simulation which utilises the means, standard deviations and correlation coefficients of risky variables to quantify the probability of achieving a positive Net Present Value of different response options. The DSS developed in this thesis has wider application in routine management of pests and diseases and in other resource allocation decisions by public agencies which impact on indigenous biodiversity.

Corporate Governance is the set of structures and behaviours by which a company or other business entity is directed and managed (New Zealand Securities Commission, 2003). The structures and behaviours guide how the entity sets objectives, develops strategies and business plans, monitors and reports on performance, and manages risks. They also guide how directors and managers meet all expectations and that they are responsible and accountable in their respective roles. In 2004 the New Zealand Securities Commission (NZSC) adopted a principle-based corporate governance approach which was intended to contribute to high standards of corporate governance in New Zealand entities. The principles/guidelines are broad statement generally applied to the governance of entities that have economic impact in New Zealand or are accountable, in various ways, to the public. The economic entities are required to observe the principles/guidelines to the fullest extent that they reasonably can and depart only where they are subject to competing statutory or public policy requirements (NZSC, 2004). This thesis investigates the effect principle-based corporate governance practices have on the financial performance of publicly listed companies and public corporate entities in New Zealand. The adoption of the principle-based approach was to encourage entities to develop governance structures that are specific to their context. Therefore, this research examines: (i) whether the NZSC recommendations have encouraged institutions to develop entity and/or industry specific governance structures; and (ii) whether the differences in governance practices at entity and industry level contribute to the differences in the financial performance. Prior studies have examined governance practices of larger corporations in large economies. The governance practices of companies in smaller economies have received little attention. This research extends the understanding of responses to smaller entities, bot

Corporate Governance is the set of structures and behaviours by which a company or other business entity is directed and managed (New Zealand Securities Commission, 2003). The structures and behaviours guide how the entity sets objectives, develops strategies and business plans, monitors and reports on performance, and manages risks. They also guide how directors and managers meet all expectations and that they are responsible and accountable in their respective roles. In 2004 the New Zealand Securities Commission (NZSC) adopted a principle-based corporate governance approach which was intended to contribute to high standards of corporate governance in New Zealand entities. The principles/guidelines are broad statement generally applied to the governance of entities that have economic impact in New Zealand or are accountable, in various ways, to the public. The economic entities are required to observe the principles/guidelines to the fullest extent that they reasonably can and depart only where they are subject to competing statutory or public policy requirements (NZSC, 2004). This thesis investigates the effect principle-based corporate governance practices have on the financial performance of publicly listed companies and public corporate entities in New Zealand. The adoption of the principle-based approach was to encourage entities to develop governance structures that are specific to their context. Therefore, this research examines: (i) whether the NZSC recommendations have encouraged institutions to develop entity and/or industry specific governance structures; and (ii) whether the differences in governance practices at entity and industry level contribute to the differences in the financial performance. Prior studies have examined governance practices of larger corporations in large economies. The governance practices of companies in smaller economies have received little attention. This research extends the understanding of responses to smaller entities, bot