Culture, Values and Integrity in Contemporary Society

Comments in the Australian press and the media have suggested that all is not well within certain sections of Australian society. This view was publicised by comments of the Chief of the Australian Army, who had stated in vigorous terms that he intends to change the culture in the Army. Changing the culture of any organisation is difficult, slow and time consuming, and so in an endeavour to facilitate this process, it is argued that some thought might be given to studying some of the classical writers who were faced with similar problems thus illustrating the relevance and timeliness of their ideas.

The relationship between corporate governance and financial performance of small corporations in Australia

This paper examines a widely explored but yet to be confirmed relationship between two latent constructs - corporate governance and financial performance of small corporations in Australia. Prior studies have either focused on larger organisations or isolated corporate governance mechanisms in small firms. However, few have examined how corporate governance mechanisms, as a bundle, relate to small corporations. This study fills this gap by empirically analysing the aforementioned relationship using Structural Equation Modelling (SEM). Based on 387 responses from small corporations, the results show that corporate governance bundles measured by the extant literature, has a negative impact on the financial performance of small corporations. The result calls for a stakeholder approach to the governance needs of small corporations.

An empirical examination of the relationship between information security/business strategic alignment and information security governance domain areas

The purpose of this study was to examine empirically the extent of the relationships between information security governance (ISG) strategic alignment and other individual information security domain areas consisting of risk management, value delivery, performance measurement, and resource management in order to ascertain whether the domain areas were integrated for ISG success in Ghanaian organizations. Corporate governance theories, including agency theory, stakeholder theory, and organizational theory, were employed to explore the literature. These theories were mapped to strategic alignment, risk management, resource management, performance measurement, and value delivery domains of information security governance. Random sampling strategy was used and data were collected via web survey. The data analysis employed a linear regression analysis to determine the degree of correlation among the domain areas. The study found that relationships between information security governance strategic alignment and other ISG domains were positively statistically significant. Strategic alignment was related to risk management (R² = .836); to value delivery (R² = .718), to performance measurement (R² = .722), and to resource management (R² = .747). The results highlighted consistent importance of strategic alignment practices as a predictor of organizational information security risk management, performance measurement, resource management, and value delivery. This implies that effective information security governance strategic alignment greatly improves organizations’ risk management, resource management, performance measurement, and delivers business value. Therefore, organizations should improve strategic alignment attributes in order to attain effective information security governance.

Editorial

This edition of the Journal is the first publication under our new publications management system. It presents an eclectic mix of papers ranging from papers with results dawn from analyses of survey data from small business, to strategic decisions about the factors affecting investment. It concludes with a more philosophical paper which addresses the ethical issues of cultural and moral behaviour in the Australian Defence Force.

Compliance Costs of Regulation for Small Business

There has been growing concern about the extent of government regulation in Australia and its impact on small business. This paper examines the results of a survey of small businesses in NSW and Victoria regarding their experiences relating to compliance with government regulation, the costs to business, and factors inhibiting performance. The paper describes the development of the survey instrument, the administration of the survey, a description of the sample, results of the quantitative part of the survey, and an overview of business owners’ comments provided by respondents.

Determinants of FDI: Does democracy matter?

Having access to foreign investments allows a country to take advantage of opportunities to which they would otherwise not have access. Many factors interfere with the ability to attract investments in developing countries, but there is lack of consensus on which factors play an unambiguous role. Using different econometric techniques for a data sample of 5 developing countries and the period 1990 to 2012, this study identifies those factors that most explain the determinants of foreign direct investment. Based on results, democracy can positively affect investors’ decisions about where to locate capital. The findings also show that foreign direct investment as a share of GDP, is significantly associated with low corruption, inflation, high openness, literacy rate and infrastructure.

Editorial

Ethics and Values in the Corporate WorldThis is the ninth edition of the Journal of Business Systems Governance and Ethics. This edition represents a new chapter in the journal’s history as it is the first to be mounted in the new e-system adopted by VU that will eventually house all the Victoria University journals. The system provides not only journal management but also a greater capacity to access papers and interact with our readers.

Relationships of Corporate Governance Mechanisms and Financial Performance in Islamic Banks: a Meta-analysis

Relationships between corporate governance mechanisms and the financial performance of Islamic banks have been researched extensively in prior empirical research. However, the results are mixed, mainly due to the heterogeneity of the samples used for the empirical investigations. This paper reports the results of a meta-analysis of the existing literature on governance mechanisms from which a framework was developed to guide the constructions of governance indices. The results showed that Islamic banks banks tend to have better financial performance if there was (1) a higher proportion of independent directors on the board; (2) the Shari”ah Supervisory Board was large and consisted of top scholars; (3)numerous directors; (4) the CEO was chairman; (5) auditing was enforced and (6) ownership structure was dispersed, reducing shareholding of directors, foreigners and institutional investors, while increasing family and governments’ shareholding. Managers’ shareholding was insignificant.

A Stairway to the Stars: Monitoring Sustainability Performance in SMBs

This article proposes a framework that can be used, or modified for use, as a mechanism to measure, evaluate and monitor progress in business sustainability. It draws upon previous change management models, such as ‘Management by Objectives’ (Lynch, 1977; Felix and Riggs, 1983) and ‘Balanced Scorecard’ (Kaplan and Norton, 1995), proposing a conceptual framework for the monitoring of business sustainability. The framework allows sustainability improvement to be monitored by means of a composite sustainability index derived from specific metrics appropriate to a range of prioritised strategic objectives. It then discusses the necessity for such a mechanism to be sufficiently robust in respect of seven contextual issues. It recommends that a firm’s choice of sustainability performance measures and their relative priorities should be aligned with global, societal, external, industry, organisational, leadership and individual-personal contexts.

Corruption and misconduct: A behavioural reflection from investigative reports into local government

This paper offers a local government perspective on the behavioural factors which can be the precursors for corruption and misconduct and those factors which can prevent corruption and misconduct. The investigation centred on corruption and misconduct evidenced from local government investigation reports in Australia, New Zealand and the United Kingdom. A corruption and misconduct taxonomy was developed and the role of the audit committee in the oversight of corruption and misconduct allegations in local government was empirically tested. The empirical findings indicated low support for an audit committee managing corruption and misconduct allegations. The qualitative research found that a robust culture of zero tolerance of corruption and misconduct was one of the best ways to keep a council honest.