Examines different approaches to the challenge of Australian corporate law enforcement and governance, and discusses success in this area and how it might be determined. Describes…
Abstract
Examines different approaches to the challenge of Australian corporate law enforcement and governance, and discusses success in this area and how it might be determined. Describes barriers to measuring success of regulatory action, and debates what level of law enforcement is appropriate and cost‐effective. Concludes that a more broadly based approach to regulatory action and assessment is of prime importance.
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Located within growing scholarly interest in linking the global financial crisis with revelations of financial crime, this piece utilises Roman Tomasic's suggestion that the…
Abstract
Purpose
Located within growing scholarly interest in linking the global financial crisis with revelations of financial crime, this piece utilises Roman Tomasic's suggestion that the financial crisis has marked something of a turning point in regulatory responses to financial crime worldwide. Tomasic attributes this to changing attitudes towards light-touch regulation and risk assessment, and the demand for existing agencies to be replaced with new tougher authorities. In the UK, this can be illustrated by the imminent replacement of the FSA with the Financial Conduct Authority (FCA). The paper aims to discuss these issues.
Design/methodology/approach
Discussion of the FSA's financial crime fighting activity is an important forecast for the likely directional focus of the FCA in this regard. A focus only on “market abuse” enforcement within this arises on account of the effects for financial systems widely attributed to this activity, with threats to systemic stability being a hallmark of the 2007-2008 financial crisis. This methodology also encourages coherence in focus and management of sources within the article. Market abuse enforcement provides a lens for exploring the FSA's adoption of the philosophy and ethos of “credible deterrence”, and FCA commitment to retain it, and ultimately for applying the hypothesis of the “haphazard pursuit of financial crime” to pre-crisis criminal enforcement relating to financial crime undertaken by the FSA.
Findings
The FSA and FCA appear acutely aware that the financial crisis has marked something of a turning point for the enforcement of financial crime, and for signalling changes in approach, for the reasons explored by Tomasic. Tomasic correctly identifies factors encouraging a range of undesirable practices pre-crisis, and ones signalling tougher and more sustained attention being paid to financial crime henceforth. It is noted that, pre-crisis, the FSA's pursuit of criminal enforcement of market abuse was conscious, comprehensively resourced, well publicised, and actually extensive.
Originality/value
This exploration of the FSA's criminal enforcement of market abuse given the Authority's own perceptions that it was not, and could never be, a “mainstream” criminal prosecutor considers the likely lasting legacy of this determined pursuit, when domestic politics and pan-European policies suggested against this. This is likely to be enormously valuable as the FCA undertakes this task in a domestic arena which is markedly in contrast from this, and where European agendas are pushing in favour of criminal enforcement, with the “more Europe, or less” debate providing a further dimension of interest.
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The financial crisis has been something of a turning point in the regulatory response to financial crime around the world. The failure of light‐handed regulation and risk…
Abstract
Purpose
The financial crisis has been something of a turning point in the regulatory response to financial crime around the world. The failure of light‐handed regulation and risk assessment by both industry and regulators made the operation of financial regulatory agencies almost untenable, often leading to calls for their replacement by more effective agencies. The purpose of this paper is to assess the nature of this regulatory challenge.
Design/methodology/approach
The paper discusses some of the case studies that have emerged from the dark side of regulatory and enforcement policies in recent times.
Findings
A culture of minimal regulation of financial markets meant that many undesirable practices (such as insider trading, foreign corrupt practices, tax avoidance, money laundering and other frauds) were able to avoid detection until public outrage led to regulatory and prosecutorial agencies being prompted into action following the collapse of financial markets.
Research limitations/implications
More detailed studies of particular institutions will be necessary; this will become possible as the current financial crisis subsides.
Originality/value
This paper explores some of the factors behind this state of affairs and makes policy recommendation in regard to the need for more effective internal controls and monitoring measures within the modern financial corporation.
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Maria Alejandra Gonzalez-Perez and Liam Leonard
This chapter examines roles and challenges for corporations in addressing Post 2015 world development objectives. Specifically it does review the contributions and opportunities…
Abstract
Purpose
This chapter examines roles and challenges for corporations in addressing Post 2015 world development objectives. Specifically it does review the contributions and opportunities of the principles of the Global Compact and other social responsibility initiatives for embedding corporate contribution to sustainable markets and societal development.
Methodology/approach
The results presented in this chapter are based on analysis of secondary sources and a literature review to determine conceptual and theoretical frameworks for identifying assumptions and challenges of corporate sustainability in the Post 2015 era.
Findings
It was found that although there are neither academic nor activist definitive consensuses regarding positive impacts of adopting the UN Global Compact principles for sustainability, the impacts of committed corporations, organisations and association are multiplying societal understanding of the implications in societies, governments and markets of violating human and labour rights, degrading and not protecting the environment, and having corruption.
Practical implications
This chapter could be used as teaching material for undergraduate and master courses of corporate social responsibility, business ethics, sustainability, operations management and strategy.
Originality/value
This chapter discusses firms’ responsibilities regarding world development objectives in a Post 2015 world.
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Ahmed Shahriar Ferdous and Michael Jay Polonsky
The purpose of this paper is to examine whether the theory of planned behavior (TPB) can be used to explain financial salespeople ' s ethical selling intentions and…
Abstract
Purpose
The purpose of this paper is to examine whether the theory of planned behavior (TPB) can be used to explain financial salespeople ' s ethical selling intentions and behaviour in developing countries. Understanding salespeople ' s ethical intentions and behaviour is important as consumers in developing countries are more at risk of ethical abuse arising from higher information asymmetry, their lower levels of financial literacy and less effective services regulation relating to ethical sales practices. Developing countries also have fewer governmental social support mechanisms, making the purchase of insurance more important for protecting consumers ' financial well-being.
Design/methodology/approach
The paper examines 205 Bangladeshi financial salespeople ' s ethical selling intentions and behaviour using the TPB. Structural equation modeling is used to analyze the constructs and overall model.
Findings
The findings identify that attitudes, subjective norms and perceived behaviour control (PBC) affect ethical selling intentions which, in turn, predict salespeople ' s ethical sales behaviour. However, PBC does not directly relate to ethical sales behaviour.
Research limitations/implications
Understanding of the determinants of financial salespeople ' s ethical selling intentions and behaviour is important for firms in developing countries and identifies that they need to develop effective management systems and foster organisational cultures that engender ethical behaviour. This is important in developing countries where ethical abuses and lapses will result in harm to consumers who have limited financial resources.
Originality/value
The results identify that the TPB applies to the selling of financial services in developing countries and, thus, broadens the applications and contexts of the TPB model. It also provides some managerial guidance as to how potential ethical breaches might be limited.
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The global financial crisis of 2007-2008 prompted a significant debate on corporate governance and shareholder empowerment. A question arises as to whether shareholders ought to…
Abstract
Purpose
The global financial crisis of 2007-2008 prompted a significant debate on corporate governance and shareholder empowerment. A question arises as to whether shareholders ought to be further empowered to have a greater influence over the companies’ activities. Yet, it is not self-evident that shareholder empowerment ensures better-run companies’ corporate activities. Thus, the purpose of this paper is to critically examine, identify and explain the corporate regulation forms and control collectively to evaluate the effectiveness of shareholder empowerment fully.
Design/methodology/approach
To do so, this paper sets out a comparative analysis approach between two jurisdictions, the UK and Delaware in the USA. The paper further addresses by undertaking three case studies; Barclays Plc which illustrated the Comply or Explain role, AVIVA (2012) that concentrated on the impact of the shareholder revolt, and the case of Hills Stores Co. v. Bozic (2000), which involved a claim brought by shareholders on the grounds of a breach of fiduciary duty.
Findings
This paper argues that the shareholder empowerment theoretically provides an effective means through which corporate activities can be regulated. However, to do this, account must be taken that a distinction should be made between long-term and short-term investors to encourage shareholder engagement by responsible long-term investors. Furthermore, the shareholders can exercise their powers effectively and influence the Board’s decision to award executive compensation.
Originality/value
This paper offered two distinct contributions: assessing whether in times of crisis shareholder empowerment represents a way to regulate corporate activities and by assessing the distinction between the perception of shareholder empowerment and the reality in practice.
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Walter Cameron Malau, Paschal Ohalehi, Eldin Soha Badr and Kemi Yekini
Financial transactions fraud (FTF) and financial statements fraud (FSF) grew exponentially during the past decades coupled with complex and sophisticated technological…
Abstract
Purpose
Financial transactions fraud (FTF) and financial statements fraud (FSF) grew exponentially during the past decades coupled with complex and sophisticated technological developments. This study aims to investigate the practitioners’ interpretation of fraud with recurring audit issues in the disclaimer audit opinions (DAOs) reports within the Solomon Islands public sector (SIPS).
Design/methodology/approach
The empirical study involves qualitative data analysis. The analysis alongside theoretical developments is informed by the “fraud triangle” theory.
Findings
The research results revealed the practitioners’ acknowledgement of FSF, FTF and fraud in the SIPS, as generally prevalent and aligned to some components of the fraud triangle theory. This study is sceptic about the good intentions of the International Public-Sector Accounting Standards –Cash-basis framework and favours the Provincial Government Act 1997 and the Public Finance Management Act 2013 requirements. It further suggests that fraud is positively linked to repeated audited report issues and the executive management when DAOs issues appear repeatedly in annual audit reports.
Originality/value
This study contributes to the literature on fraud and attempts to link the interpretation of fraud with recurring audit issues in the DAOs reports in the SIPS. It views fraud awareness and knowledge from the perspective of the audit practitioner. There is an increasing need to understand how fraud knowledge impacts decision making and the actions of auditors and others, an area that is underdeveloped.
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Bojan Dobovšek and Boštjan Slak
The purpose of this paper is to show the interconnectivity between the economic sphere, governance and organised crime and to shed light on the role of white-collar crime and show…
Abstract
Purpose
The purpose of this paper is to show the interconnectivity between the economic sphere, governance and organised crime and to shed light on the role of white-collar crime and show that constant redefining of the term “organised crime” has certain downfalls.
Design/methodology/approach
Methods of analysis and examination of relevant domestic and foreign primary and secondary resources and legal acts are used. The paper is theoretical in nature, as review of literature was the main method used for our argumentation.
Findings
The term and phenomena of organised crime have now long enjoyed the attention of many researchers, institutions, policymakers and others. And yet, in this quest for unification, proper definition and classification, it seems that we have somewhat strayed from that original idea of what organised crime represented in the period when this term was first coined. Unfortunately, by doing so, we failed to include the most dangerous forms of behaviour, i.e. (some, not all!) white-collar crime, which falls within the scope of organised crime.
Practical implications
Despite the fact that ideas presented in this paper belong to the old masters of criminology, they have lately been slightly forgotten. The paper is therefore useful to those who are interested in seeing how original ideas about the nature of organised crime are applicable today.
Originality/value
The paper provides an insight into the somewhat overlooked scholarship of those who deal with organised crime and white-collar crime.