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This study provides empirical evidence of the gender gap in retirement savings trajectories using a large longitudinal Australian database. The persistent trend of retirement income policy over recent decades has been to place responsibility for retirement savings accumulation with the individual employee. These plans are fundamentally linked to employment conditions and individual choices, which shape retirement savings trajectories and outcomes. Australia has a mature compulsory system and thus provides insight for countries embarking on similar paths. This study shows that the gender gap in retirement savings is observable from early on in an individual’s paid working life and persists over time, providing evidence that women are disadvantaged early in their careers, with few signs of improvement. Men, in contrast, are overrepresented in the upper quartile of growth in retirement savings. This study provides important empirical evidence for policymakers concerned with gender differences in retirement outcomes.\ud \ud

This article explores the relation between individual well‐being, risky decision‐making, susceptibility to cognitive biases and investor beliefs about investing. A survey of one hundred and two individuals revealed that those with higher satisfaction with life are more prone to taking risks. In a loss frame, participants who were most likely to take a gamble had higher levels of psychological, social and overall well‐being. Lower levels of satisfaction with life were found to impact the susceptibility of the reflection effect cognitive bias. In addition to this, well‐being was found to be associated with investment beliefs, particularly those concerning diversification, the need to be alert and active, and the risk/return trade‐off.

This article examines the relation between gender diversity and earnings quality for Australian firms from 2005 to 2013. We draw on the work of Kanter, highlighting the importance of the proportion of women on the board when measuring diversity. We show that all-male and skewed boards have lower earnings quality while that of tilted and balanced boards is higher. In addition, a critical mass of women is achieved when some 30% of directors are females. Performance and risk do not influence the relation. We contribute by presenting evidence supporting critical mass theory. Furthermore, our work adds to the recent debate on whether the association between gender diversity and earnings quality is U-shaped, rather than linear. Our results have implications for regulation and practice. We identify the need for a critical mass of women, rather than tokens, to enhance earnings quality.

The transition from a rules-based auditing standard (AS2) to a principles-based auditing standard (AS5) provides a context to assess how such a change impacts audit outcomes. Under a rules-based auditing standard, audit processes are relatively uniform, unscaleable and include significant redundancy. Under a principles-based auditing standard, audit effort can be directed to where risk is greatest; audits are scalable and can be customized. We find that the post-SOX shedding of risky clients by the Big 4 meant that non-Big 4 clients were more likely than Big 4 clients to disclose material internal control weaknesses (MICWs) when assured under AS2. This gap narrowed significantly following the transition to AS5, when risk-based customized audits were possible which benefited Big 4 firms to a greater extent than non-Big 4 firms.

This study investigates whether firm-level accrual mispricing exists and if such mispricing is persistent. Our results show both under and overpricing of accruals that persevere. Specifically, we show that a trading strategy going a dollar long (short) in underpriced (overpriced) accrual firms yields significant abnormal returns in most years investigated. We examine whether firm characteristics such as size, analyst following and real activities management can explain why some firms are mispriced and others not. Our findings show that firm-level mispricing differs from that documented at the country-level. Whilst the country-level anomaly seems to have diminished; the firm-level accrual anomaly remains.

This study develops a weighted internal governance index as a comprehensive proxy of good governance in Australia. We identify those variables empirically found to be associated with good governance and include them in a principal component analysis to calculate the index. We apply Principal Component Analysis to examine the internal governance of a sample of 450 listed Australian companies for the period 1999 – 2006. Results indicate that there are two key facets to internal governance in Australia: Board Activity and Board Independence. They in turn incorporate eight specific governance factors which are included in the index on a weighted basis. This approach contributes to the literature by overcoming a number of limitations of previous governance measures and is the first internal governance index to be developed. A similar approach could be employed in other countries to overcome difficulties with previous index efforts and to provide a more comprehensive measure of firm level (internal) governance. The findings of this study have many implications: for firms, there is now a straight forward basis on which to compare their governance standards with those of competitors as well as against prior years. For investors, they can now easily identify which firms are better governed and incorporate this factor in the share selection process as well as lobby for further improvements.

This study examines the relationship between board structure and performance of Australian listed investment companies (LICs hereafter). With lower fees and simplified taxation over other managed funds, LICs provide a useful investment vehicle. LICs differ from other companies as their customers and investors are the same and fund management functions are often outsourced. LIC boards, in turn, are tasked with monitoring duties and determining service fees for fund managers. Agency problems are likely as fund managers’ desire larger fees (and fund size) whereas LIC shareholders seek higher return. Whilst the nature of agency issues therefore differs from ordinary companies, the prior Australian LIC literature is limited. We document a significant relationship between director tenure and LIC performance. Specifically, we find director tenure to be negatively associated with LIC performance. Board busyness and independence increases LIC expense ratios whilst board size is negatively associated with market to book value.

Executive remuneration is often criticised as being excessive and not clearly linked to firm performance. This study further examines the link between pay and performance by examining the impact of promotion-based tournament incentives. Our hypotheses draw on tournament theory of labour economics which argues that the ‘gap’ between the remuneration of CEO and other senior executives creates a tournament-style competition for promotion amongst ambitious senior executives. The efforts of these highly motivated executives have a positive influence on overall firm performance. Whilst tournament theory is well studied in the US and UK (Conyon et al. 2001; Kale et al. 2009; Gong et al. 2011), Australian evidence is sparse. Our empirical analysis therefore seeks to better understand the determinants of tournament incentives, particularly surrounding the appointment of a new CEO. Further, we test whether firm performance is influenced by the magnitude of tournament incentives. Our results suggest that tournament incentives play a significant role in enhancing firm performance, but that this positive impact is somewhat reduced after a change in CEO. We also find that closer alignment of CEO pay (through equity compensation) is positively associated with firm performance. In regards to the determinants of tournament incentives we find that tournament incentives are lowest after a change in CEO. This study therefore contributes to the topical debate on executive compensation by providing evidence on the effectiveness of tournament incentives and their relationship to firm performance in the Australian environment. It is one of the first to examine whether tournament incentives play any role in the pay-for-performance relationship in Australia and findings are likely to be of interest to researchers, policy makers, corporations and their shareholders, given the increased current focus on executive compensation and the lack of clear alignment with firm performance.

We examine gender diversity, its impact on firm performance and earnings quality and particularly whether a critical number of female directors are required to empower them to best fulfil their duties on corporate boards. The extant literature shows a positive association exists between diversity (measured as one woman on the board) and earnings quality, but no relationship with performance is documented. We propose these studies measure “tokenism” (having one woman on the board) rather than diversity (having enough female directors to empower them) and that a critical mass (number of women) is needed for “normalization” to occur allowing removal of the gender barrier (Asch, 1951). We therefore examine boards with three or more female directors in relation to firm performance and earnings management and show firms with at least three female directors significantly outperformed others and also have better earnings quality. True gender diversity therefore appears to be associated with improved performance; tokenism, on the other hand, is not.