The topic of the thesis poses the question "To what extent do the ASX Principles of Corporate Governance and Best Practice find support in the historical development of corporate law, in traditional common law precepts and codes of best practice published throughout the 1990s and early 2000s?" To address the thesis topic it has been essential to research the extent and historical significance of political and economic events, legislative development, common law and procedural practices, and the part that each has played in the evolution of codes of best practice. The research establishes that codes of best practice are a natural development of legal and societal controls over corporations. The historical tenets of corporate governance support this prognosis and are compared with the ASX Principles to demonstrate their progression and relevance in a modern business environment. The company law has played a vital role in ensuring that legislative controls work in reality, given that they apply to the fictitious legal persona of the company, in a behavioural manner expected of a natural person. The research addresses the validity of a number of long-held legal tenets covering separate legal identity, organic theory and separation of management powers applicable to the structural composition of companies and their concomitant effect on corporate governance. Clearly, the advent of greater transparency as demanded by most codes of best practice has had a significant effect on the relevance of these common law tenets. The tensions between co-regulatory and self-regulatory regimes and the provisions of the Corporations Act 2001 (Cth) have been examined to determine areas of duplication and relevancy. Research shows that over the decade 1993-2003 there are significant limitations of the law in this field giving rise to the question of the role of codes of best practice. In this context, codes of best practice are seen as very important because they are pro-active (incorporating a mix of public policy and community stakeholder expectations of corporate management practices) and at the same time not overly prescriptive in their application. Their non-prescriptive nature does, however, present somewhat of a dilemma where self-regulatory regimes are actively encouraged by industry bodies without the means to adequately enforce compliance by listed companies. To some extent this poses a danger to the ASX as a corporate regulator favouring a more stringent statutory based regime under the control of a revamped ASIC. An historical examination of the Australian experience confirms that the law tends to lag behind events. Preoccupation with codes of best practice internationally over this period also demonstrates that codes seek to reflect responsible corporate behaviour expected of natural individuals. Responsible corporate behaviour is not restricted to the members of corporations but must include wider stakeholder interests. The downgrading of the importance of stakeholders in the 2007 revision of the ASX Principles is seen as a retrograde step, particularly with respect to the growing community concerns over issues such as environmental degradation and climate change. In final analysis, the research reveals impediments connected with the lack of prescription as applicable to the ASX Principles and international codes generally. This has significant applications to co-regulatory and self-regulatory regimes as they affect the corporate governance procedures of corporations and their concomitant connection with the provisions of the Corporations Act 2001 (Cth). This enigma is considered as best being addressed by two possible alternatives. Firstly, companies would be given the opportunity to adopt replaceable rules outlining their code of best practice which would supersede the ASX Principles with the aim of eliminating statutory duplication. Secondly, companies would have the possibility to register a deed of covenant with ASIC and the ASX passed by members in general meeting, outlining their code of best practice and incorporating significant areas of the Corporations Act 2001 (Cth) and the provisions of the ASX Principles. Both would be encouraged to strengthen the corporate bond with stakeholders. The ultimate aim is to preserve the link between management, the members, the stakeholders and the market generally, with the crucial role of the ASX being recognised as the upholder of public policy values.
|Date of Award||2008|
|Supervisor||Geoff Nicoll (Supervisor) & Anne Daly (Supervisor)|