How should regulators deal with entrenched company executives?

Byrnes, Liam & Chapple, Larelle June (2015) How should regulators deal with entrenched company executives? Company and Securities Law Journal, 33(4), pp. 266-280.

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The regulatory framework for corporate governance, both in Australia and internationally, shifts between rules based regimes and principles based approach. The rules based regimes are typified by legislation that imposes mandated compliance based rules, such as the Sarbanes Oxley Act. Other regimes, such as Australia’s CLERP 9 and the ASX Corporate Governance Council’s principles, have opted for a disclosure approach. This paper examines these approaches in the context of the non-binding vote rule, which arguably combines aspects of both. The study’s methodology empirically considers evidence relating to actual voting patterns as well as case study examples of the non-binding vote’s effectiveness. Significantly, our analyses show that from its inception, the non-binding vote was effective in motivating management to change the remuneration package to one they perceived as more acceptable to shareholders and that the non-binding vote is an effective regime to manage CEO remuneration (and by extension) executive remuneration.

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ID Code: 81913
Item Type: Journal Article
Refereed: Yes
Additional URLs:
Keywords: Executive remuneration, Company Executives, CEO performance
ISSN: 0729-2775
Subjects: Australian and New Zealand Standard Research Classification > LAW AND LEGAL STUDIES (180000) > LAW (180100) > Commercial and Contract Law (180105)
Australian and New Zealand Standard Research Classification
Divisions: Current > QUT Faculties and Divisions > QUT Business School
Current > Schools > School of Accountancy
Copyright Owner: Copyright 2015 Lawbook Co.
Deposited On: 19 Feb 2015 02:44
Last Modified: 21 Sep 2015 12:18

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