Briefing: The 2017 Annual Corporate Law Teacher Association Conference
In February 2017, the 26th Annual Corporate Law Teachers Association (CLTA) Conference was co-hosted by the Accounting Finance & Economics Department within the Business School and the Law School at Griffith University, Gold Coast Campus. The Conference proceedings included opening keynote addresses by Professor Sally Wheeler, Head of Law, Queen's University, Belfast and Professor Pamela Hanrahan, Deputy Head School of Taxation & Business Law, University of New South Wales. Chaired by Gill North, a distinguished panel consisting of The Honourable Justice J Bond, John Weaver and Kath Hall debated policy and law reform issues surrounding the conference's theme.
The 2017 CLTA Conference theme of Agile Corporate Law: CSR, Innovation & Environment focussed on the challenges facing corporate law in responding to an agile and innovative corporate culture and the impact this may have on ensuring a sustainable future for society both domestically and internationally. This conference edition showcases a selection of papers addressing this theme by exploring corporate culture and ethics, global corporate social responsibility, as well as issues in securities and financial services, insolvency and corporate governance.
A number of articles in this issue focus on the corporation as the vehicle to drive innovation within Australia. To begin, Sally Wheeler identifies not only the opportunities, but the potential risks and costs of innovation. To mitigate such risks and costs, the author presents the arguments for responsible innovation and its practices and considers the corporation as the most obvious means to facilitate such practices.
Michelle Worthington's article continues this theme of responsible corporate conduct. Relying upon Sir Isaiah Berlin's principles of "Value Pluralism," Worthington argues that poor corporate behaviour reflects the corporation's focussed attention on investor expectations, disregarding the broader range of community values it should be responsive to, given the current role corporations play in society. Worthington's article recognises the need to reconfigure the corporate form as a constructed ethical agent so that it no longer prioritizes the corporation's financial interests but allows for profit-sacrificing behaviour by corporations. Key to such reconfiguration is her jettisoning from the existing framework of directors' duties the concept of corporate interests and replacing it with a value system based upon community expectations.
Like Michelle Worthington, Katie Watson in her article reconsiders the purpose of corporate law. Relying upon a series of case studies from Australian corporate law history, Watson puts forward the case that modern Australian corporate law results from a series of political and economic compromises, rather than a coherent single purpose response to the needs of industrial capitalism. Rejecting the single purpose theory of corporate law, Watson seeks to demonstrate that the social and political aim of gender equity may be implemented using corporate law, not on a business case basis as a means of maximising profit, but that if social concerns require it, then corporate law may be the means of achieving such a goal.
Pamela Hanrahan, adopts a consistent interpretation of the role of corporations in her assessment of corporate governance within these times of innovation, corporate agility and changing corporate culture. Interestingly, in her article Hanrahan considers the recent development of a corporation's "social licence to operate" gaining more widespread traction and the role of institutional investors in corporate governance as reflecting the increased influence of environmental, social and governance criteria within a corporation's values proposition. Certainly, the unwritten social contract operating in a manner that is attuned to community expectations is directly relevant to both Worthington's reformed constructed ethical agent and Watson's view of corporate law as a tool for achieving political and social goals.
Roman Tomasic also considers corporate culture in his paper, but as a regulatory tool in Australia to assist in re-establishing public confidence and trust in public companies, most specifically banks and financial institutions. Despite corporate culture's seeming attractiveness as a simpler approach to regulating toxic management behaviour and misconduct within organisations, Tomasic concludes that the very fuzziness of the concept makes it a difficult tool to use as a legal mechanism, especially in criminal prosecutions.
A number of authors in this conference edition have also considered innovative tools to achieve various aims and objectives of corporate law. In his article, Michael Duffy researches and assesses the utility of private security class actions in vindicating the public interest and supplementing the public enforcement of securities laws. He does so by first identifying the objectives of public enforcement of securities laws and assessing the extent to which private security class actions achieve or seek to achieve these objectives by studying nineteen of the largest successful securities class actions or claims in Australia. Duffy concludes that while some private security class actions have better satisfied the public interest criteria than others, there is still a need for effective public enforcement of security laws.
Larelle Chapple, Kerrie Sadiq and Feng Xiong identify a number of challenges and opportunities faced by Australian companies when using social media tools as a disclosure channel for corporate information. While recognising that social media provides a low cost and high efficiency alternative communication channel for a company and its stakeholders, their paper acknowledges three main challenges of using social media as a communication channel, including the risk of breaching misleading and deceptive conduct. To meet these challenges their paper proposes and discusses in turn eight practice recommendations.
Recognising challenges arising from the use of a special purpose vehicle, (SPV) as a restructuring investment tool in the context of a cross-border insolvency is the focus of Casey Watters article. Using a case study analysis of the Indonesian restructuring of PT Bakrie Telecom, Watters demonstrates that the use of the SPV-bond investment structure, whereby the SPV issues bonds on behalf of a parent company, exposes the investors to additional risk by excluding investor participation in the parent company's insolvency proceedings as investors are creditors of the SPV, rather than the financed parent company. Watters proposes an innovative solution to ensure a universalist approach of equal treatment of similarly situated creditors and fair treatment of all parties by advocating that the votes of the SPV should represent the interests of its creditors in the parent company's insolvency. By granting representation to the SPV's creditors, and disallowing the votes controlled by the parent company he suggests that SPV's creditors are then fairly protected in accordance with universalistic values.
Lastly, but by no means least, Richard Bradstreet, in the context of the business rescue provisions within the Companies Act 2008 (South Africa), proposes a model of mandatory mediation to address some of the shortcomings of the existing procedures which attempt to achieve a more stakeholder inclusive philosophy of addressing insolvency. In doing so the author seeks to rebalance the tensions between protecting creditors and a more equitable distribution of value among stakeholders within insolvency procedures.
On behalf of the conference convenors, I wish to thank the editors of the journal, Tony Damian and Professor Chris Symes for their invitation to edit the special edition. My experience as guest editor has been most interesting and enjoyable. I am also very grateful for the support of the Journal's editorial team, in particular I wish to thank team leader, Catherine Zemann.
Dr Jennifer Dickfos & Catherine Brown, Griffith Business School
Associate Professor Therese Wilson, Griffith Law School