School of Accounting and Commercial Law

Events at the School of Accounting and Commercial Law

Listed below are forthcoming events either hosted by the School of Accounting and Commercial Law; or the Centre for Accounting, Governance and Taxation Research; or the Chair in Public Finance.

Corporate Sustainability Practices and Regulation - Gill North (Professorial Research Fellow, Deakin University)

Date: 28 October 2016

Time: 11.00 am

Venue: RWW129

Gill has provided the following introduction from her paper which is in draft form only and she has asked that it should not be copied or forwarded on:

Large corporations do not exist or operate in a vacuum, and must constantly adapt to the environments in which they operate in order to survive and prosper. They must also satisfy, where possible, the many demands and expectations of the groups they influence and with whom they interact.[1] Many listed companies around the globe are voluntarily responding to mounting calls from investor and stakeholder groups for consideration and reporting of non-financial factors and outcomes. This is evidenced by reporting frameworks that include, among others, management discussion and analysis, disclosure of corporate social responsibility (CSR), sustainability and citizenship information, and integrated reporting.[2] As these various reporting developments build momentum, policy makers are reviewing the legal frameworks and are establishing new rules or strengthening existing regulation around the governance and disclosure of information on employee, supplier, diversity, human rights, community impact, and sustainability matters.[3] All of the regulatory options in use or mooted in the corporate sustainability space rely on disclosure as a means to drive awareness of sustainability matters and to ultimately move the culture and activities of corporations towards more sustainable business practices.-------------------------------------------------

[1] The OECD indicates that ‘Corporate governance involves a set of relationships between a company’s management, its board, its shareholders and other stakeholders. Corporate governance also provides the structure through which the objectives of the company are set, and the means of attaining those objectives and monitoring performance are determined’: OECD (2015).

[2] The purposes and content of corporate social responsibility reports, corporate citizenship reports, corporate sustainability practices and reports, and integrated reports overlap and include similar content regardless of the report title. For the purposes of this chapter, these frameworks are treated as interchangeable and referred to as sustainability reporting in most of the discussion.

[3] See for example KPMG International (2013) Survey of Corporate Responsibility Reporting pp9–10. The KPMG survey reviewed corporate responsibility (CR) reporting across the 100 largest companies in 41 countries. This report notes that almost all of the world’s largest 250 companies report on CR with 78 percent of these companies referencing the Global Reporting Initiative guidelines. It suggests that the debate has well and truly moved on from whether or not companies should report on CR; the important issue now is the quality of such reporting and the best means to reach relevant audiences.

Non-GAAP disclosure practices and CEO Compensation - Dr Dinithi Ranasinghe (Otago University)

Date: 11 November 2016

Time: 11.00 am

Venue: RWW129

We examine the association between CEO cash and equity compensation and non-GAAP disclosure practices. We assert that CEO compensation provide incentives for managers to define their own non-GAAP measures to justify their performance and these incentives are more pronounced when the traditional earnings benchmarks are not met. Using a sample from New Zealand public companies we find that frequency of non-GAAP disclosures has increased over the period. There is an increase in the provision of reconciliation between non-GAAP measures and closely related GAAP measures. We document that cash salary, cash bonus and other cash benefits are significantly associated with the probability and frequency of non-GAAP disclosures while equity and stock options are not. In particular mangers use these disclosures when their GAAP earnings missed earnings benchmarks. Although we find an increasing trend in providing reconciliation between non-GAAP measures and closely related GAAP measure over the sample period, CEO compensation and quality of reconciliation was not significantly associated.

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