ALBERT

Notes: In March 2001 the government announced that new disclosure rules relating to UK boardroom pay would be introduced. This paper critically evaluates these proposals. The new proposals emerged from the government’s Directors Remuneration consultative document issued in July 1999. The current paper makes the following contributions to the governance literature. First, the new disclosure proposals are reviewed. I suggest that they are incomplete both in their detail and scope. I also suggest that the government has conceded that more US style executive compensation disclosure is required. Second, I describe US executive compensation disclosure practices. If convergence in disclosure practice is potentially desirable then a more systematic comparison and analysis of current disclosure policies in the two economies is warranted.

Notes: One of the persistent problems facing corporate governance is the increasing shift toward knowledge-intensive organisations. This article focuses on the fiduciary responsibility of corporate governance for creating, developing, and leveraging the intellectual capital existing and embedded in the people, structures, and processes of the firm. Research and practice, traditionally concerned with governance responsibility for financial and physical capitals, has not much focused on the relations between governance and intellectual capital. Here, the authors’ intellectual capital paradigm is overlayered on a recent taxonomy of systems and features of corporate governance. The result is an explication of the role and characteristics of corporate governance in relation to the intellectual capital of the firm.

Notes: Given conflicting theoretical perspectives and inconsistent empirical results, this study examined the relationship between board leadership structure and organisational performance. A meta-analysis based on 22 independent samples across 5,751 companies indicates that independent leadership structure has a significant influence on performance. This relationship varies depending upon the context of the study.

Notes: The paper offers an inside view of the German corporate governance model, based on interviews with over 100 members of supervisory- (Aufsichtsrat) and executive-boards (Vorstand) of major German corporations. The traditional supervisory board with its large size of 20 members, one half elected by the employees, reflects the strong consensus orientation of the German corporate world. This system worked well in times of long innovation cycles and largely separate, national capital markets. It is coming under increasing pressure to adapt to the demands of a fast changing globalised capital market.Keywords: Corporate governance in Germany, supervisory board, codetermination, board composition, professionalisation of boards

Notes: This paper argues that constructive relationships between investors and boards have become crucial to running large organisations. Comparing interview data from Chairmen, Chief Executives and board members in 1987–89 and 1998–2000, this paper also considers the changing role of NEDs and influence of board culture which may constrain NEDs’ ability to perform effectively. While the board’s influence on shareholder value may be significant, the inability to account for its effectiveness or contribution appears surprising. The paper concludes that as shareholders exercise their “absolute rights” to question management, this may encourage more covert rather than overt behaviour, raising questions of accountability.

Notes: The process of building a corporate governance system in Poland is an ongoing one. It may be assumed, however, that the past ten years have seen the foundation created for the system. The institution of the supervisory board occupies an essential position within the infrastructure. For its part, the developing capital market, with such important institutions as the Securities and Exchange Commission as well as the Stock Market, fills a significant – though not yet broad – supporting function. It must be remembered, however, that the Polish system of corporate governance is still very young and is subject to continuous transformations. To a great extent, the direction of these transformations is marked by the quest for ever more effective solutions in the realm of supervision whilst the pool of experience already accumulated makes possible the implementation of the selected orientation.

Notes: Book reviewed:Sir Adrian Cadbury, Family Firms and their Governance: Creating Tomorrow’s Company from Today’s

Notes: Growing interest in UK corporate governance has engendered research on specific issues of corporate governance reform. However, there seems to be little research on the more general impact of recent reforms in corporate governance. In this paper we employ an extensive postal questionnaire survey to investigate: (i) UK institutional investors’ general attitudes towards recent corporate governance reforms; (ii) whether UK institutional investors consider specific corporate governance initiatives to be of equal importance, and; (iii) whether all institutional investors represent a homogeneous group with respect to corporate governance reform. The empirical results indicate that institutional investors: (i) have generally welcomed the recent reforms; (ii) do not consider that specific corporate governance initiatives are equally important but attach more relevance to initiatives aimed at monitoring the principal/agent problem, and; (iii) may be treated as a homogeneous group, except in relation to voting policy, where pension funds appear more pro-active in their approach than other groups.

Notes: This paper develops and provides evidence for two statements: a) In Argentina, there has been a marked shift in ownership and control from big family-owned domestic companies towards foreign groups and investment funds, and b) While coping with governance issues, Argentina has been following the common law countries tradition, fostering a capital-market-based financial system and swapping its corporate governance practices outright. To ground these statements on facts, I survey corporate governance issues in this country before 1991, the underlying legal framework, the new rules of the game in capital structure and ownership as from 1991, largely due to a wave of privatisations, restructuring, mergers and acquisitions that took place through the last decade.

Notes: This paper examines China’s recent approach to the development of corporate governance and discusses some major corporate governance issues that need to be resolved. It focuses on the corporate governance issues of China’s larger state owned enterprises that have been corporatised and partially privatised. While the state enterprise sector has been on decline in terms of its contribution to industrial output, its dominance in urban employment, key industries and access to bank finance continues. The publicly listed and partially privatised enterprises portends in many ways the future path in corporate governance arrangements for all other kinds of enterprises in China. The study is based on results of survey data collected by the author on Shanghai’s publicly listed companies. An attempt is also made in this paper to outline a new corporate governance model that may be more appropriate for China’s social and economic conditions. The paper is organised as follows. Section 2 outlines the way the Chinese government has approached the development of corporate governance structures in China in recent years. Section 3 examines some major issues for corporate governance development in China. Section 4 outlines a new corporate governance model that may be better suited to China for the near future. Section 5 provides some conclusions.

Notes: Based on a survey of charity boards in England and Wales this paper examines what influence board inputs, structures and processes have on board effectiveness. The findings provide mixed support for the normative literature on board effectiveness. Using stepwise logistic regression the research suggests that board inputs and three process variables are important in explaining board effectiveness, namely: board members have the time, skills and experience to do the job; clear board roles and responsibilities; the board and management share a common vision of how to achieve their goals; and the board and management periodically review how they work together.

Notes: This article presents the reasons which led the business community in Greece to reconsider existing corporate governance practices of listed corporations in the Athens Stock Exchange, outlines the general rationale for the creation and adoption of specific recommendations for best corporate practice, presents the recommendations in full detail and finally provides suggestions for the required corporate legal reform.

Notes: This paper examines the impact of the entry and exit of board of directors on the share price of United Kingdom listed firms. Unlike previous studies in the area, this study distinguishes between the different type of board changes. The results of the study suggest that changes in the composition of management boards affect shareholders wealth. Small but significant positive abnormal returns are experienced on the day of the announcement. The results also indicate that the informational effects of new appointments are perceived differently by the market from resignations from the management board.

Notes: Accounting, auditing, and tax professionals constantly evaluate the integrity, competence, and financial performance of clients as factors in practice that influence both client acceptance decisions and the manner in which professional services are rendered. Yet, from an accounting perspective, previous research investigating the corporate board of directors as a governance mechanism has focused only on the representational role of board members. Moreover, many of these studies resulted in conflicting findings according to these attributes. Other disciplines address the particular influence of the board with respect to overall corporate performance, but arrive at little agreement on either the effect of or the most critical of board attributes. This literature review synthesizes the existing research to provide a framework in which to evaluate the effect of the board of directors in accounting settings and, in particular, when conducting future research that employs elements of corporate governance as dependent or independent variables in accounting studies.

Notes: This study describes the survival cases of two local savings banks in Finland during fundamental changes in 1990’s when 90% of the Finnish Savings Bank Group did not survive. Survival is studied through the roles of the non-executive boards and the CEOs in the context of three change periods. Institutional theory is used as a framework in describing and explaining the survival. The cases describe how radical renewals can be made despite dominant actors and generally agreed ways of change in the field. It is suggested that the CEO and the non-executive board of directors were in a key role in changing the future of a local savings bank. Old institutions can die, but the active role of the small banks themselves was decisive; by taking active role they recreated and renewed their organizations (c.f. Greenwood and Hinings 1996).

Notes: The name of Sir Adrian Cadbury has become synonymous with the development of corporate governance. His original involvement was chairing the UK Committee on the Financial Aspects of Corporate Governance in 1991, whose report has taken the name of Cadbury into the annals of the subject. Since then Sir Adrian has visited 28 countries, contributing massively to the raising of board level standards around the world. Now he reports that he has enjoyed this governance odyssey, but is “retiring from this particular field”. His contributions as a member of the Editorial Advisory Board of this journal have been very significant. Here he draws some conclusions on the state of corporate governance and likely developments in the future.

Notes: The author has made significant theoretical contributions to the literature of corporate governance, with works such as Corporate Governance, The Emperor’s Nightingale and Power and Accountability, and major practical interventions through his representational investing through his vehicle the Lens Fund and, more recently, Hermes Fund. He is a distinguished member of this journal’s Editorial Advisory Board. In this paper he responds to the recent UK Department of Trade and Industry consultation document on the future of company law in Britain. We believe that this contribution highlights some important aspects of the corporate governance debate, as well as arguing to some interesting possibilities for the UK. Although the paper stands on its own, references to ‘The Strategic Framework’ have been left in for scholars wishing to explore the arguments further.

Notes: This paper examines the financial rewards received by the directors of the listed Water companies in the five years following privatisation. It considers the salaries, the bonus payments, the gains from executive share options, and the increase in pension entitlements. The increase in the level of the financial rewards of directors of Water companies was greater over this period than of directors in other companies. This was partly the result of the comparatively lower levels of salaries prior to privatisation and partly the result of high gains from executive share options. One of the reasons for the high level of gain on options was the underpricing of the initial public offer of shares. From a corporate governance point of view the period following privatisation was unique in terms of the conditions in which the companies were operating. The annual levels of reward for those directors in post five years after privatisation was in line with directors of similar size companies.

Notes: A new theory of organizational change and success has recently been proposed, organizational portfolio theory (Donaldson, 1999). One purpose of this theory is to provide a fresh perspective on the determinants and consequences of board composition. After outlining organizational portfolio theory, this paper suggests some implications of the new theory for understanding the dynamic relationship between board composition and firm performance.

Notes: Kay, Carolyn, Institutional investors and corporate governance: best practices for increasing corporate value

Notes: The current UK government emphasizes the importance of mechanisms of accountability that involve the planning and public reporting of performance. One example of this is the Best Value performance plan. However, there has been little evaluation of the quality of the information provided in this type of document. This paper draws on literature on stakeholding and user needs to identify the data required for accountability. It then assesses whether the plans produced by Best Value pilot authorities in Wales provide appropriate information. The analysis shows that very few of the plans contained the relevant material. Interviews in the pilot authorities highlighted two key reasons for the poor level of data: a lack of performance indicators prior to Best Value and limited staff expertise in performance measurement. The evidence suggests that documents such as performance plans currently make little contribution to the accountability of public organizations.

Notes: The computerization of the medical record has important implications for the governance of health care, and the importance of health care means that changes wrought there are indicative of changes in government as a whole. This paper draws on work in public policy, medical sociology and studies of science and technology, as well as on cross–national empirical research in Britain and France. It describes the recent development of information policy in health care as an exercise in state–building, realized specifically in the governance of the health professions. The paper concludes with a discussion of what is both new and not so new in the form and extent of state power which emerges.

Notes: This article analyses the ‘partnership principle’– which is of particular importance for multilevel governance interpretations of European integration – as it evolved in EU regional policy–making. After sketching in the crucial analytical lines of the current debate on ‘partnership’ on the example of the implementation of the EU structural policy in Germany, I examine how it functions. A closer look at two important sub–fields of ‘partnership’–‘societal participation’ and ‘policy evaluation’– reveals that theoretical expectations regarding its transforming potential, in terms of pitting supranational and subnational actors against central state authority and thereby circumventing the latter, have not materialized. On the contrary, recently rising resentment and out–and–out conflict between the European Commission and regional authorities so far point to theoretically unexpected limitations of ‘partnership’, calling into question whether it is an appropriate and sustainable inter–administrative co–ordination device – at least when viewed from the perspective of the EU multilevel governance thesis. In the light of the reported insights into the practice of ‘partnership’, this ‘new mode of EU governance’ thus needs to be reassessed.

Notes: The report describes the flow of manuscripts and the contents of the journal before briefly surveying each section of the journal. It ends with a résumé of changes during the year and a thank you to the many people who have helped.

Notes: Drawing on insights from grid–group cultural theory the article argues that New Labour’s approach to government units beyond Westminster and Whitehall rests on a fatalistic reading of its environment that specifies its key features in terms of low–trust relationships and a lack of predictability about the success of a range of potential reforms. New Labour’s response in these circumstances resembles that of strategy based on the principles of a lottery. The strategy has allowed a plethora of decentralization units and reform initiatives to find favour but none to dominate. The article explores the nature of this strategy, how it was established and the prospects for its maintenance. The key point is not that New Labour’s polices have been ad hoc or even that they have been confused. Rather, its policies are a chosen course of action aimed at searching for the right reform formula and creating a dynamic for change by encouraging instability but also space for innovation among the institutions of devolved governance. The strategy is aimed at an overarching goal of developing an enabling state form. The adoption of the strategy, in addition, reflects political contingencies. Moreover, the lottery strategy has helped New Labour sustain its coalition of supporters and manage tensions between different reform approaches.

Notes: Analyses and policy statements about publicly funded services frequently distinguish ‘demands’ from ‘needs’. The distinction has been challenged, calling into question the coherence of formulating welfare policy and evaluating public services in terms of needs. This paper explicates the conceptual distinction between demands and needs in terms of derived demand and information asymmetry. ‘Needs’ can be defined as ‘rational demands’, where ‘rational’ means ‘consistent and evidence–based’, and ‘demands’ as ‘desires’ rather than ‘effective (i.e. economic) demand’. On that basis, practical demand management in needs–based public services would require:1. Knowledge of users’ demands for services;2. Content analyses of users’ demands to identify any misinformed demands;3. Conversion of any misinformed demands into evidence–based specifications of needs;4. Formulating coherent, evidence–based demands on behalf of users who cannot to do so themselves.A study of English NHS Primary Care Groups explores the problems which authorities responsible for publicly funded services face in undertaking these activities. Demand management receives low priority in terms of the incentives and intellectual resources applied to it. Needs assessment has higher priority but is regarded as a branch of evidence–based professional practice, controlled by professionals rather than responsive to users. This separation tends to defeat the purposes of needs–based public services.

Notes: As one means of dealing with an increasingly interdependent or shared power ‘noone in charge’ world (Bryson and Crosby 1992) and adapting the public sector to the demands of the global economy, successive administrations in the UK have aimed to develop a more strategic approach to public procurement by emphasizing inter–departmental co–ordination and establishing long–term partnership relations with suppliers. This has proved to be a difficult task, however, as the operating framework and culture of the public sector have hindered the development of interorganizational relationships and trust. By focusing on the co–operative processes and interaction within central government departments and between departments and the private sector, this paper aims to analyse and identify the obstacles to, and opportunities for, implementing long–term supply relations and facilitating departmental co–ordination. While the paper argues that partnership relations can build social capital, it also shows that these resources can have both positive and negative effects for public procurement. To conclude, lessons for developing collaborative arrangements in public procurement are identified.

Notes: This paper examines the Beacon Council Scheme as a distinct policy element within the UK government’s wide–ranging local government modernization agenda. The aim of the Beacon scheme is two–fold. First, reward for high performing councils and second, the achievement of substantial change by sharing ‘best practice’ from identified centres of excellence. The scheme presupposes an implicit theory of organizational change through learning. The Beacon Council Scheme is based on the assumption that the organizational preconditions exist which will facilitate learning, and through its application to practice, improve service delivery. The paper analyses the presumed and possible conditions which facilitate or impede interorganizational learning and service improvement through the scheme. The paper then examines empirical data from 59 local authority elected members and officers about their attitudes towards and motivation to take part in the Beacon scheme during the first year of its existence. The data indicate that there are differing motivations for participation in the scheme and that these reflect different learning needs. The experiences of local authority participants suggest that the formulators of the dissemination strategy at the heart of the scheme have not yet given sufficient consideration to the processes of interorganizational learning, the conditions that support such learning between authorities and the embedding of new understandings, practices and organizational cultures in the receiving authority. This suggests that the underlying theories of organizational learning and cultural change may be insufficiently developed to create and sustain the kind of transformational change that is intended by central government.

Notes: This paper seeks to examine some aspects of the early operation of the Northern Ireland Assembly and in particular the role of the Statutory Committees. The particular issue that is used to explore these matters is the review of student finances which the Higher and Further Education, Training and Employment Committee (HFETEC) undertook as its first major investigation. It should be noted here that the Department of Higher and Further Education, Training and Employment changed its name to the Department of Employment and Learning during 2000. The Committee also changed its name to the Employment and Learning Committee. Since the issues discussed took place prior to these changes the original name has been used here. Specifically, the paper examines the Review of Student Finances launched by the Department of Higher and Further Education, Training and Employment (DHFETE), how the Committee tackled the issue, tensions within the Committee, the relationship between the Committee and the Minister, between the Minister and the Department, the public debate, how the Committee Report was subsequently dealt with in the Assembly and the Minister’s response. It is suggested that this example provides some insights into the operation of the distinctive devolved institutions in Northern Ireland and some early evidence of how such Statutory Committees may develop.

Notes: In 1991 eight polytechnics offered a BA in public administration while five universities provided the degree with either public or social policy. Currently, no higher education institution in Britain offers a BA degree solely entitled ‘public administration’. The subject area is, however, offered in 16 higher education institutions under a variety of names that include, in any order, the words ‘public’, ‘management’, ‘policy’ and ‘administration’. This paper analyses the reasons for the transformation during the 1990s in undergraduate courses for the public sector. It is argued that these changes do not so much derive from academics, employers or students taking on board an enthusiasm for new public management but are as much the consequences of deregulation of student choice and an expansion in student numbers that has not been matched in financial terms. The consequence has been to increasingly move this sector towards business and management teaching geared to private sector interests and away from its more political and social science roots.

Notes: This paper presents the detailed results of an empirical survey on tele–democracy in 31 European cities covering 14 states. It shows that progressive city–administrations in Europe are early adopters of tele–democracy with a diffusion rate of 72 per cent. Analysis of the survey results illustrates that cities are using tele–democracy to improve service access and the quality of services. This research shows that electronic or Internet voting is a priority for only a minority of cities. The paper suggests a typology of tele–democracy and makes wide–ranging policy suggestions. In the debate over whether information and communications technologies will have a beneficial or detrimental effect on the quality and legitimacy of local government, this paper takes an optimistic stance based on the evidence of the survey.

Notes: Books Reviewed:Stephen P. Osborne (ed.), Public–private partnerships. Theory and practice in international perspectiveNeill Nugent, The European CommissionAnne Stevens with Handley Stevens, Brussels bureaucrats? The administration of the European UnionMichelle Egan, Constructing a European market – standards, regulation and governanceR.A.W. Rhodes, Control and power in central–local government relationsSteve Ludlam and Martin J. Smith (eds), New Labour in governmentHuw T.O. Davies, Sandra M. Nutley and Peter C. Smith (eds), What works? Evidence–based policy and practice in public services

Notes: Emphasis on ‘globalization’ within academic literature is reflected in the contention within public administration that the prescriptions of the New Public Management are an inescapable fact of life from which states have little scope for resisting. However, variation persists both between and within countries. Since 1997, devolution within the UK and novel intergovernmental structures occasioned by the Belfast Agreement for Northern Ireland have transformed the territorial governance of the UK and the wider British Isles, providing further evidence of the differential impact of NPM. In seeking a better understanding of these differences, examination of the administrative arrangements of small communities or micro states can offer fascinating comparative insights into the workings of larger states, especially those with whom they enjoy a direct relationship. Frequently, however, small communities are overlooked in favour of studies of countries with more political weight. The micro states of the British Isles (namely, the Isle of Man and the Channel Islands) illustrate the point. However, with a few notable exceptions, relatively little is published. To correct this deficiency, this article seeks to explore developments in the Isle of Man, specifically its civil service. In so doing, the article aims to broaden our understanding of the changing governance not only of the Isle of Man, but also of the UK and beyond.

Notes: This article summarizes a study of the political, bureaucratic and economic elites in Spain, from the Franco regime through the democratic transition to the socialist governments of the 1990s. Data on the people holding posts in one or more of these elite groups were used to test and extend the theory of elite circulation first formulated by Vilfredo Pareto. The data confirms that Spanish elites became more open to others in the democratic period. Up to the present time, they continue to be integrated through multi-positionality – many bureaucrats also hold political or economic posts – though to a lesser extent than in the past. Our empirical findings enable finer distinctions to be made about the different modes of elite circulation. These results show the changing nature of the networks that form when posts in different sectors become associated through multiple post-holding. These networks are an important component of the social fabric in Spain and elsewhere and deserve further investigation.

Notes: This article reviews ‘corporatization’ and ‘marketization’, shorthands for privatization, in the Chinese economy. In particular it concentrates upon the most recent round of state-owned enterprise reforms, the Modern Enterprise System and Group Company System, aimed at transforming China’s largest state-owned enterprises into internationally competitive corporations. This represents a partial privatization, given that the state will retain majority ownership, while acquiring domestic and foreign capital via sharelistings and foreign and domestic joint ventures.Drawing upon interview material from a five-year study of state-owned enterprises, the authors will indicate that such part privatization has been pragmatic and relatively slow. It has been constrained and circumscribed by broader economic and social reform programmes and accompanied by political decentralization and reforms. Ultimately, the reform and pace of reform is shaped by the desire to avoid political and social unrest which could, potentially, threaten the harmony of the Chinese central state apparatus.

Notes: David McKay, Designing Europe – comparative lessons from the federal experienceHellmut Wollmann and Eckhard Schröter (eds), Comparing public sector reform in Britain and Germany: key traditions and trends in modernisationChristopher Pollitt and Geert Bouckaert, Public management reform – a comparative analysisMichael Moran, Governing the healthcare state: a comparative study of the United Kingdom, the United States and GermanyRobert Hazell (ed.), The state and the nations: the first year of devolution in the United KingdomLuc Rouban (ed.), Citizens and the new governance: beyond new public managementNeal D. Finkelstein (ed.), Transparency in public policy: Great Britain and the United StatesGraeme A. Hodge, Privatization: an international review of performanceJohn Stewart, The nature of British local governmentRichard A. Chapman (ed.), Ethics in the public service for the new millenniumClive Gray, The politics of the arts in BritainKenneth Dyson, The politics of the Euro-Zone: stability or breakdown?Roger Levy, Implementing European Union public policy

Notes: Governance theory raises conceptual and theoretical questions about the coordination of complex social systems and the evolving role of the state within that process. A central aspect of the governance debate focuses on the ability of national governments to address salient social issues. This article examines the British Labour governments’ attempts to facilitate cross-departmental inter-organizational collaboration within Whitehall in an attempt to develop innovative responses to seemingly intractable social problems. The government’s desire and strategy to increase its capacity to orchestrate ‘joined-up’ government can be interpreted as both an acceptance and a response to the challenges of modern governance. The article locates the structural, procedural and cultural responses to this challenge within the theoretical and analytical framework of governance theory. It concludes by suggesting that meaningful change in the way public policy is designed and implemented may well demand a more deep seated reappraisal of the structure of Whitehall and the dominant values of the British political elite than is currently anticipated.

Notes: Given that the contingent worker is likely to be a familiar presence in the public service workplace of the future, this paper explores the consequences of contingent work arrangements on the attitudes and behaviour of employees using the psychological contract as a framework for analysis. Drawing upon survey evidence from a sample of permanent, fixed term and temporary staff employed in a British local authority, our results suggest that contract status plays an important role in how individuals view the exchange relationship with their employer and how they respond to the inducements received from that relationship. Specifically, contingent employees are less committed to the organization and engage in organizational citizenship behaviour (OCB) to a lesser degree than their permanent counterparts. However, contrary to our hypothesis, the relationship between the inducements provided by the employer and OCB is stronger for contingent employees. Such findings have implications for the treatment of contingent and non-contingent employees in the public services.

Notes: There is no doubt about the political necessity of the Eastern enlargement of the European Union and corresponding reforms of its political institutions. By contrast, the shape and content of these reforms is a subject that is highly contested between the member states. In this context, when the German Foreign Minister, Joschka Fischer, presented his vision of future development for Europe his ideas were refreshingly welcome. However, Fischer’s ideas imply, in many respects, a turning away from hitherto accepted paths to European integration. The main claim we want to make in this paper is that, against the backdrop of this breach with the present European-level institutional system, the chance that the Fischer initiatives could come to political fruition must be viewed with scepticism. On the basis of this finding, which rests essentially upon a historical-institutionalist analysis, we develop an alternative concept for a European constitution.

Notes: Administrative policies and practices may evolve and change slowly and incrementally or they may be transformed intentionally. Intentional efforts to change administrative policy by transforming the structure, processes, or personnel of public sector organizations define an active administrative policy. Ideally, an active administrative policy takes as given that the organizational form to be used is open to choice, that administrative goals are clear, that a tight coupling exists between ends and means, that different organizational forms have different effects, and that there are criteria that may be used to assess those effects. This article focuses on the fulfilment of these preconditions in the three national contexts – Norway, Sweden and the United States of America – in order to determine the relevance of a transformative perspective for understanding the process of administrative change. We examine what impact constraints like polity features, historical-institutional traditions and external pressure, particularly through popular international administrative doctrines like New Public Management ideas and financial crises, have on the possibilities to enhance an active national administrative policy.

Notes: Governments have been encouraging public service organizations to innovate. However, little is known about the extent of innovation in public service organizations. A private sector approach to the measurement of innovation - the literature-based innovation output indicator (LBIOI) - is applied to public service organizations to address this significant information gap. The method is described and then explored in one public service sector, English housing associations. A sample of 257 innovations is constructed and then subject to analysis. This initial testing of the LBIOI indicates that the approach can be applied across public services to create longitudinal data sets, which will enhance the communication of good practice and the use of evidence in public policy, management and research. This methodology is demonstrated to offer initial insights to public service innovation and would allow relationships to be explored notably innovation and performance, a relationship central to government’s promotion of innovation.

Notes: Organizational culture is the pattern of values and beliefs held by members of an organization and the management of culture is now one of the most frequently discussed of all organizational concepts. The excitement associated with culture is attributable to two factors. First, it is argued that culture is the key to organizational performance; simply stated, a strong organizational culture can be a source of competitive advantage. Second, culture is perceived as an alternative method of control to traditional and technocratic forms of management and can be manipulated to ensure that employees are enthusiastic and committed to organizational objectives.Despite the extensive interest in this topic, culture remains an elusive concept. This paper investigates the nature of culture and considers strategies for introducing cultural change. Specifically, the aims of the paper are threefold. First, to locate and explain the interests and significance of culture change for the public sector. Second, using a case study of a newly created agency, to investigate the problems and issues affecting cultural change in the civil service. Third, to reassess and critically evaluate the claims for culture management made in the literature. Finally, this paper questions some of the assumptions in the literature, which with few exceptions are biased toward top management and the unitary conception of organization, an ideological frame of reference which is particularly problematic in the public sector.

Notes: Policy makers are increasingly recognizing the importance of helping ex-offenders into employment. This article outlines the disadvantages faced by those with a criminal record in the labour market and evaluates several approaches to meeting the needs of ex-offenders seeking work. It finds that, despite recent policy developments, the changing nature of British public administration is undermining the ability of practitioners to respond appropriately to the needs of ex-offenders. The article concludes that the real concern of policy makers is to show that they are doing something about the social context of criminal behaviour while at the same time drawing attention away from the increasingly centralized and authoritarian nature of our public agencies.

Notes: The financial crisis affecting many of the local authorities in Israel has a significant influence on their ability to supply municipal services of an appropriate amount and quality. So far, studies have been addressed to the financial crisis from a political approach by discussing aspects such as the problematic interrelation between central and local governments together with resource allocation. In this paper we investigate the financial crisis of many local authorities in Israel from a strategic point of view. However, this is by no means to argue that other approaches such as institutional and political ones are not important. Rather, the paper investigates whether the financial crisis affecting many Israeli local authorities is a result of their own strategies and practices.Specifically, we have used the resource-based approach to explore the nature of their joint crises and the potential strategic responses that the local authorities should adopt in order to move into a more favourable state. In particular, we examine three resource-based systems: customer-oriented, organizational culture, and human resources, as the strategic roots of this crisis. We also examine the way they could produce a sustainable competitive advantage and could lead local authorities from the present position to a better one. The article recommends that the heads of local authorities should move to a resource-based strategy in order to perform both more efficiently and effectively.

Notes: Recent research has suggested that there is movement towards a ‘regulatory state’ in the UK with regulation an expanding area of government. This article identifies key Scottish differences from UK practice and suggests the growth and scale of regulation inside Scottish government is more modest than suggested by UK-wide research. It also reviews existing oversight arrangements within Scottish government for public service delivery bodies and questions whether many of these activities warrant the label ‘regulation’, arguing that a more accurate description is performance management.

Notes: How a government secures the implementation of its policies is one of the most interesting processes in public administration. The tendency of scholars is to ignore implementation and how it impacts on the form of policy, something which invariably changes once resources have been allocated to implementing agencies and the policy detail is addressed. Traditional ‘top-down’ (Pressman and Wildavsky 1984, Mazmanian and Sabatier 1981) and ‘bottom-up’ (Elmore 1979, Hjern and Porter 1981, Hull and Hjern 1983) analytical frameworks give only a partial explanation of outcomes. In making the case for a netwrok approach, a typology of implementation networks is presented. The utility of this typology is evaluated in the context of one of the most complex privatization programmes attempted by any government: the privatization of British Rail (BR) between 1992 and 1997. In the case of the sale of one BR subsidiary train operating company, ScotRail, a variety of agencies with competing interests and acting in a politically-charged climate exchanged essential resources to deliver the policy, though not without generating unintended outcomes in the form of significant change to the policy and the agencies charged with implementing it.

Notes: Many academics have questioned the thesis (most prominently associated with Osborne and Gaebler’s Re-inventing government) that there is an inevitable and global convergence towards a particular, new style of public management. Yet, despite the ongoing production of scholarly evidence of global diversity, pronouncements of convergence continue to be made by politicians, civil servants and some academics.In this paper it is suggested that, better to understand this apparent controversy, a more subtle conceptualization of convergence is needed. First, convergence can take place at different stages or levels — for example, there can be convergence in debate, convergence in reform decisions, convergence in actual practices, or, ultimately, convergence in results. There is no automatic succession from one stage to the next: the momentum of convergence can (and frequently does) stall or dwindle at any point. Furthermore, it should be recognized that convergence claims may have a value of their own, whether or not they lead to actual convergence of practice or improvements in outcomes. Convergence, in short, may be a useful myth.

Notes: Books reviewed:C. Hood, C. Scott, O. Jones, G. Jones and T. Travers, Regulationinside governmentJ. Pierre (ed.), Debating governanceR. Pyper, and L. Robins (eds), United Kingdom governanceG. Stoker (ed.), The new management of British local governanceG. Stoker (ed.), The new politics of British local governancePrue Chamberlayne, Andrew Cooper, Richard Freeman and Michael Rustin (eds.), Welfare And Culture In Europe: Towards A New Paradigm In Social PolicyOECD Report, Trust In Government. Ethics Measures In OECD CountriesAnthony R. Zito, Creating Environmental Policy In The European Union

Notes: The paper discusses the issue of power relations and sharing as the basis for instituting a corporate governance procedure. It argues that the peculiar and unstructured nature of the developing economies makes the running of many existing limited liability companies remarkably different from the governance processes of modern Plc and multinational corporations which are controlled (at least in principle) by the owners through shareholder democracy enshrined in the Annual General Meetings. The need for an understanding of the concepts, processes and problems of corporate governance both from the perspective of those who direct, those concerned with returns and accountability, and those concerned with corporate regulation encouraged the author to provide a menu of hypotheses of corporate governance and its relevance to Nigerian corporate bodies. The paper then zeroes in to discuss corporate governance in the banking industry as well as the problems and consequences of the quality of such a governance. In section four of the paper, a crystal eye-ball and prognostic view was taken of corporate governance in the Nigerian banks in the twenty first century. The paper concludes by providing the recipes that would ensure good corporate governance in the private sector, particularly in Nigerian banks, in the short and long-run.

Notes: Judging the quality of top management is a pivotal aspect of good corporate governance. Such an evaluation requires standards which can be applied to the work of top management. In the German stock corporation this is particularly important for the Supervisory Board (Aufsichtsrat), because its main task is to control the quality of the Management Board (Vorstand). The development of generally accepted management principles seems to be a promising attempt to facilitate a fair management evaluation. These management principles are supposed to put in concrete form the top management’s duties of care. They thus can help to assure a certain management quality as well as to protect managers against exaggerated demands. After elaborating on these basic thoughts, a system of standards is outlined and the results from a first survey investigating the acceptance of the proposed standards among German top managers are reported.

Notes: All directors are faced with real, or imagined, conflicts of interest or competing demands for time and resources, between shareholders and stakeholders. This has always been the case, but the contemporary emphasis on stakeholders has brought this to a head. Although astute organisations and directors maintain a suitable balance between the various demands placed upon them, and there are systematic ways to do this, there are a few voices opposed to stakeholding in any shape or form. In order to suggest that stakeholding is the viable and sustainable way for companies to proceed, the article considers and criticises one anti-stakeholder, together with other antagonists, before bringing in endorsements from different quarters, and introducing three categories of stakeholding of which the normative holds most promise. Practical approaches to discriminating among the claims of various stakeholders are indicated.

Notes: The paper examines the economics of the mutual organisation and the stakeholder models of corporate governance with its emphasis on informal contracts, trust and co-operation. These concepts are important in informal governance systems such as mutuals because they economise on transaction costs and promote efficient exchange. In this respect, the paper argues that mutuals have a comparative advantage compared with joint stock banks in ameliorating problems associated with adverse selection and moral hazard. These comparative advantages, however, are enhanced in small mutuals such as credit unions which focus on relatively small memberships with a common bond. The paper concludes by suggesting that although the credit union movement will not necessarily develop along similar lines to the building societies, it does have a future in providing banking facilities to the relatively poor and disenfranchised sectors of society.

Notes: Book reviewed:Charkham, Jonathan and Simpson, Anne, Fair Shares — the Future of Shareholder Power and Responsibility

Notes: There is increasing interest by top management in matters connected to integrated Business Risk Management (BRM). At the same time, BRM frameworks aimed at facilitating compliance with corporate governance requirements are being developed (e.g. Lipworth, 1997). This paper explores ways in which top managers in six UK companies covering the service to manufacturing sectors and ranging in size from large to small took practical steps towards understanding and implementing BRM. Approaches by managers ranged from the naive to the sophisticated. In the study one of the particular perspectives considered was the possible influence of legal considerations. In this context, one of the principal drivers to introducing BRM in the present climate of corporate accountability was found to be fear of exposure in the media for mis-handling risks rather than concerns about the enforcement of any law.

Notes: Book reviewed:Richard Branson, Losing My Virginity – how I survived, had fun and made a fortune doing business my way

Notes: Faced with major shifts in public opinion and societal change on an international scale, together with the strategic requirements of newly emergent forms of business structure, new technologies, globalisation and new forms of competition, modern companies are facing a crisis in their boardrooms. Traditional forms of governance architecture are being challenged and boards are under pressure to develop a broader mindset and new skills to deal with the uncertainty of higher-level issues such as direction-giving and implementation of strategy.The paper proposes a framework developed from research which examines the selection, evaluation and performance of boards of directors in New Zealand. From this research a need for strategic vision and leadership has clearly emerged as a key requirement in director capability, but in practice there is an acknowledged variation among individual directors in terms of their competence in this regard. Implications for further research suggest the need to explore the strategic role of the modern board in value creation, the extent to which directors perceive a link between strategy and corporate governance and their level of participation in this process.

Notes: This paper presents findings from an in-depth empirical study of the role of boards and their relations with senior managers in four organisations from the public and non-profit sectors. The findings are interpreted using a conceptual framework which sees the outputs of boards as shaped by board inputs, processes and contextual factors, in particular wider institutional pressures. The results indicate that the strategic contribution of boards varies widely and depends on a complex interplay of factors: the system of regulation, sectoral traditions and norms of governance, the way board members are chosen, board members skill and experience, organisational size and status, and the way boards are organised and run. The wider institutional pressures that shape these factors can result in boards facing tensions and trade-offs that can result in their contribution to stragegy being squeezed by other board roles.

Notes: Despite the tremendous importance of transnational firms in the world economy, relatively little is known about the structure of their boards and how they are governed. Four hypotheses, suggested by intuition and the general literature, are examined: that the composition of boards of large transnationals is likely to be substantially different from that of national boards; that boards of transnationals will take a leadership role in dealing with social and economic issues that transcend national boundaries; that boards of subsidiaries of transnationals are playing an increasing role in the general operations of transnationals; and that boards of transnationals will show a larger concern for stakeholders than boards of national firms. On the basis of very limited data it is concluded that all hypotheses are false. Moreover, based on Canadian experience, it is suggested that the strategy of many large transnationals of eliminating the boards of subsidiaries may be a major mistake. Finally, a request is made for anyone wishing to participate in a large research project on the governance of transnational corporations to contact the authors.

Notes: In this paper, we assess the impact of recent reforms in UK corporate governance, focusing specifically on aspects of the reforms which apply to unit trust managers, a major group of institutional investors, and their investee companies. We canvass the views of UK unit trust managers to shed light on three issues: the extent of shareholder activism by UK unit trusts; the extent to which longer and stronger decision and communication links are being forged between investment institutions and their investee companies, and; the emerging controversy over whether or not these recent reforms represent a help or a hindrance for unit trust managers. The empirical findings indicate that unit trusts: are active shareholders, developing and using written voting policy documents; are encouraging the development of longer and stronger links with their investee companies, and; have welcomed corporate governance reforms.

Notes: If the word “stakeholder” were a person, it would just be coming into its prime. Born in 1963, it has accumulated experience in influential positions, and ought to be prepared for some serious responsibility. But what exactly does it offer, and is it ready?This paper tries to show that the stakeholder concept is ready. In the first half, it explains three principles that form the heart of the idea: co-operation, commitment and rich information. Rich information, in particular, is given a new role in interpreting stakeholder theory. The second half of the paper focuses on a practical issue: methods for encouraging co-operation. For fifty years, organizational psychologists at the (UK) Tavistock Institute and the (US) National Training Laboratories have developed methods for changing relations in the workplace. The principles underlying their work are shown to be very close to the principles underlying the stakeholder approach. This means that the stakeholder approach has foundations in an important body of practical scientific experimentation.Lastly, by explaining the principles underlying the idea of stakeholding, this paper fills a gap which has previously prevented the identification of a convincing causal connection between stakeholder policies and business performance.

Notes: The Corporate Governance Committee of the Corporate Governance Forum of Japan, chaired by Mr. Tadao Suzuki, President of the Mercian Corporation, published their final report in May 1998. Their innovative work followed a long period of discussion and stemmed from the original foundation of the Corporate Governance Forum in 1994 by Mr. Kaneo Nakamura of the Industrial Bank of Japan, who invited top business leaders to discuss governance issues.The following extracts from the first two chapters of the report provide some valuable insights into corporate governance perspectives and practices in Japan. The report offers a set of principles which provide a two-step formula for realizing effective corporate governance in Japan –“principles which should be adopted immediately (or as soon as possible after legal reform) are shown as step ‘A’ principles: step ‘B’ principles should be aimed for early in the 21st. century “to illuminate the path toward the global market, but require legal reform on a grand scale.”

Notes: Shareholders can gain effective control over their firm’s management by voting to choose an outside agency to nominate director candidates. This would give the board and management a greater incentive to serve the owners’ interests, resulting in higher productivity of capital, more realistic levels of executive pay, less short-termism, and a moderation of the corporate bloat that tends to necessitate drastic cuts. Such a system would further improve corporate governance in western countries, and provide a much needed “quick fix” for governance problems in Asia.

Notes: The paper takes both an historical and an international perspective on the issue of mutuality and identifies a number of important themes in the current debate on mutuality versus “plc” conversion. The paper accordingly argues that in the short term the problem of excess capacity and the need to reduce capital is an important motive behind the recent spate of conversions. In the long term, however, the greater flexibility and the opportunities to raise additional capital which are associated with public company status are an important impetus behind this debate. In this respect, a number of alternatives to outright conversion which have not been sufficiently debated in the literature are identified and examined. Emphasis is placed on the European and US experience where savings and loans institutions have introduced a number of alternatives to outright flotation. In particular, the various merits and de-merits of mutual holding companies are examined as an alternative to outright conversion.

Notes: Major extracts from the London Stock Exchange report

Notes: Although legally auditors are answerable to shareholders, considerable doubt has been cast on their independence from the directors of the company which is audited. Recently, increasing competition amongst auditors and the growing importance to fee income of non-audit work has been identified as factors which may further erode this assumed independence. Another factor which has been implicit in many studies of auditor independence is the close nature of the relationship between the auditor and the directors of the company. This has been termed the ‘Familiarity Threat’.This article, based on a questionnaire survey of UK finance directors, investigates three aspects of the auditor/director relationship where the ‘Familiarity Threat’ may be present. First is the appointment method and the characteristics which directors consider to be preferable in selecting an auditing firm. Secondly is the duration of the auditors’ appointment and the frequency of contact between the lead partner and the finance director. Finally, is the finance directors’ perception of the nature of the relationship they enjoy with the auditors. For each of these aspects the responses from finance directors from independent public limited companies are compared to those of private companies to ascertain whether the ‘Familiarity Threat’ is more prevalent where certain public responsibilities are not imposed. Where appropriate, the responses are also analysed by the finance directors’ opinions on the probity of non-audit work to ascertain whether this is an important variable as claimed in the literature.The analysis demonstrates that, although present directors are influential in the appointment process and the personal chemistry between the directors and auditors is the most important desirable characteristic, the finance directors of independent public limited companies would appear to be more aware of their responsibilities to shareholders. However, many relationships are long established with over 40% of both private and independent public limited companies in the survey retaining their auditors for over 10 years. As far as frequency of contact is concerned, public limited companies were visited more frequently by their auditors and this was unaffected by finance directors’ opinions on the probity of non-audit work. Finally, approximately 75% of finance directors claimed to enjoy a professional and amicable relationship with their auditors and these responses are unaffected by the type of company or opinions on non-audit work.The article concludes that there is the potential for the ‘Familiarity Threat’ to be present in both private and independent public limited companies, but its influence may be exaggerated particularly in respect of non-audit work. It recommends that if controls are to be introduced to ensure the threat is kept to a minimum it would be best to concentrate on the selection and appointment process and the duration of auditors’ term of office.

Notes: This paper outlines the formal structure of Dutch two-tier boards and compares the formal structure with the reality of board practices of the largest Dutch companies listed at the Amsterdam Stock Exchanges. This comparison questions the supposed independence of two-tier boards.

Notes: The last decade has witnessed a growing debate over corporate governance issues in a number of countries. The debate developed from Anglo-Saxon countries, such as the UK and US, where dispersed share ownership and thriving takeover markets are evident with financial systems referred to by Zysman (1983) as market based. However, the debate now includes countries with credit-based financial systems (Zysman, 1983), such as Germany and Japan, which are characterised by intercompany shareholdings, intercompany directorships and often substantial bank involvement. A question of considerable importance is whether the two systems of corporate governance will converge over time, particularly in the context of increasing globalisation of trade. To contribute to this debate, this paper focuses on corporate governance in Japan, an issue that has been debated with great interest in Japan by businessmen, academia, critics, government, consumers and even the accountants!

Notes: Clauses in company articles giving boards rather than shareholders the power to remove directors, can give either the chairman or chief executive the power to retain their tenure even when performance is less than satisfactory. A power holder can simply remove opposition from a board as soon as it is expressed. When used ruthlessly, such power makes it almost impossible for independent non-executive directors to carry out their most important role of monitoring executive directors and removing non-performers at an early stage. Machiavelli claimed that extension of tenure was a prime cause of Rome’s decline. He argued persuasively for fixed terms, with no variation possible. The prohibition of removal clauses, and the introduction of fixed director terms might well increase corporate performance by preventing continued tenure for those who have failed.

Notes: One aspect of organizational governance is the power to propose issues for consideration in the formal decision process. Consortia composed of autonomous business organizations appear to be a good context for investigating this “proposal authority,” because when a consortium is not too large it tends to be governed by a board of directors on which all the members are represented. This makes it possible to test hypotheses about the effects of the consortium’s internal structure on the rules that govern who may propose issues for decision and how they may do so.We study here the formal rules, given in organizational charters and by-laws, for initiating specific types of decision in 53 consortia in the electric power industry in the USA. Hypotheses are developed from numerous theoretical perspectives, including the institutional, ecological, developmental, structuralist, resource-dependence, economic, and political-economic. We find a fair degree of heterogeneity in the practices of initiative control among these organizations, yet only the familiar structuralist theory is able to predict significantly the variation in these decision rules. This weak result poses interesting problems for future research.

Notes: The purpose of this paper is to provide an insight on the relationship between internal governance and the nature and outcome of UK takeovers. The paper examines the impact of board composition and leadership, managerial ownership and external shareholder control on management’s attitude and eventual outcome of 331 takeover bids. We find the likelihood of a hostile reaction negatively related to the degree of managerial share ownership and positively related to target size. The likelihood of takeover success is positively related to managerial ownership. Consistent with recent research in the US, our study confirms the important role of managerial ownership in the UK takeover process.

Notes: In line with the journal’s editorial policy, this case has been published to provide insights into a real governance situation. All too easily we tend to interpret governance situations in companies around the world in the light of our own experience. We make assumptions about the underlying power base, the behaviour of management, the attitudes of directors, the perceptions of the shareholders on the basis of our own values, beliefs and expectations. In fact, they can be strikingly different.This case describes the governance structure of a leading company in Eastern Europe and describes the information provided by its supervisory board. The case is based on material in the public domain, mainly the 1996 annual report, and is provided without commentary or comment. In future case studies we intend to invite the board chairman or other key players in the case to provide a commentary.

Notes: Stapledon, G.P. (1996) Institutional Shareholders and Corporate Governance.Partnoy, Frank (1997) F.I.A.S.C.O. – blood in the water on Wall Street.