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2011 International Corporate Governance Conference: Corporate Governance and Value Creation

14-15 December 2011, Sydney AUSTRALIA



An international interdisciplinary conference for management, accounting, finance and law researchers and practitioners.

This conference was held by the Centre for Corporate Governance (CCG) and the newly-established Centre for International Finance and Regulation (CIFR)* on the 14-15 December 2011 in Sydney featuring international and national presenters and speakers.

Corporate governance essentially is about accountability and strategic direction. For too long corporate governance has been conceived as a one-dimensional focus upon monitoring, compliance and regulation. The contribution of corporate governance to value creation is an important field for research inquiry.

Value creation in recent decades also has been narrowly conceived as the maximisation of shareholder value. In fact, business activity creates value in many forms: for investors, for stakeholders, and for the community. Furthermore, it is now realised that the environmental impact of business activity can no longer be dismissed as an externality: the environmental cost or benefit of business is becoming a key determinant of the assessment of whether particular businesses are in reality creating value, or leaving a legacy of environmental damage.

The role of corporate governance in value creation can be conceived in many ways: investment institutions supportive and sustained engagement in long term corporate value creation; codes of corporate governance that encourage creativity and innovation as long as it occurs within a framework of accountability; the selection, composition and orientation of boards of directors towards value creation; performance measurement systems that facilitate rather than constrain value creation.

One of the more contested areas in corporate governance concerns the role of boards of directors regarding strategy and innovation: is the sum of their responsibility simply to monitor and control strategic direction, or are boards responsible and equipped for a more direct engagement in strategy formulation?

The focus on compliance in governance fails to recognize the dynamic of board relationships that determine the effectiveness of boards. Paradoxically it is boards of directors engagement in the strategic process of corporate direction that determines their capacity to accurately assess and monitor the capability and performance of the management of businesses.

Boards of directors' participation and contribution to strategic thinking is a vital part of the dynamics of boards and of their relationship with management. It can be argued that the ultimate objective of the board is to create long term values and sustainability for the firm, for the economy, and for society.

*Australia's new Centre for International Finance and Regulation (CIFR) will assist government, regulators and industry to meet emerging challenges and opportunities in the field of global finance. It will link and support international policy-makers, regulators, industry and academia to anticipate, prevent or contain future financial crises. The Centre complements the Australian Government's response to the Australian Financial Centre Forum Report (The Johnson Report) to boost Australia's regional engagement and contribute to the debate on global financial market regulation.