Governance in Small NFPs: Request for Focus Group Participants

dreamstime_s-govResearchers from Macquarie Unversity and the University of Western Australia are seeking Directors and CEOs of small Not-for-profit (NFP) organisations (<$10m revenue) for a study focused on governance issues in practice.

The aim is to develop resources and principles for board performance that support better practice board performance under contemporary funding models and contexts.

Our team is seeking participants for 1.5hr focus groups on Wednesday 15th March, to be held in the Sydney CBD (near Wynyard Station).

Groups will be run at two times:

  • 8am to 9:30am
  • 12:30pm to 2pm

The focus groups will be hosted by Professor David Gilchrist (University of Western Australia), Professor Nonna Martinov-Bennie (Macquarie University) and Dr Dale Tweedie (Macquarie University).

We would like to discuss your experiences working on or with a small NFP board, and your views on what governance principles, measures or guides you use or might find useful. This information will assist in the development of practical governance principles and tools.

All individuals and organisations participating in the study will remain anonymous. Participation is entirely voluntarily. No remuneration will be provided, but summarised findings of the study will also be made available to all participants on request.

If you are interested in participating, please e-mail Dale at dale.tweedie@mq.edu.auwith a brief statement of your role and experience and which focus group time would suit you best.

The ethical aspects of this study have been approved by the Macquarie University Human Research Ethics Committee. If you have any complaints or reservations about any ethical aspect of your participation in this research, you may contact the Committee through the Director, Research Ethics (telephone (02) 9850 7854; email ethics@mq.edu.au). Any complaint you make will be treated in confidence and investigated, and you will be informed of the outcome.

Request for research participants: Ethics of performance appraisal

dreamstime_xs_22737173Researchers from Macquarie University are seeking participants for a study into people’s experiences of performance appraisal or management in their workplaces. The aim is to develop a framework for conducting performance appraisals or management ethically.

Researchers are seeking to conduct interviews of approximately 45 minutes with people who have been employed in a professional role for at least 5 years. The interview will cover your experiences and views of the performance appraisal or management you have experienced.

All individuals and organisations participating in the study will remain anonymous.

Participation is entirely voluntarily. A small gift voucher ($50) to a bookstore will be provided to thank you for your time. Summarised findings of the study will also be made available to all participants on request.

If you are interested in participating, please contact the chief investigator, Dr Dale Tweedie, at: dale.tweedie@mq.edu.au.

The ethical aspects of this study have been approved by the Macquarie University Human Research Ethics Committee.  If you have any complaints or reservations about any ethical aspect of your participation in this research, you may contact the Committee through the Director, Research Ethics (telephone (02) 9850 7854; email ethics@mq.edu.au). Any complaint you make will be treated in confidence and investigated, and you will be informed of the outcome.

Will Integrated Reporting improve sustainability?

Featured

– Dr Dale Tweedie and Prof. Nonna Martinov-Bennie.

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If the Integrated Reporting Framework is successful in engaging business and investors, how – if at all – will this success affect sustainability?

This is the first of a series of short blogs that address this question, based on a new article published in the Social and Environmental Accountability Journal in February, 2015.

What is sustainability?

The word ‘sustainability’ has many different meaningsWe use the term to refer to a replicable and just use of social and natural resources. This is the ideal of sustainability made famous by the World Commission on Environment and Development’s definition of sustainability as ‘meet[ing] the needs of the present without compromising the ability of future generations to meet their own needs’.

One difficulty with assessing how the Integrated Reporting framework will affect sustainability is that the International Integrated Reporting Council (IIRC) itself uses the word ‘sustainable’ to mean two quite different things:

  • Sustained value creation; which refers to a company’s ability to continually create value over time; and
  • Natural and social sustainability; which refers to companies that consider how their actions are connected to, or impact, society and the environment.

These two ideas are linked, but they are not synonymous. For example, an energy company might profitably sustain itself extracting and selling fossil fuels for many years, without necessarily considering its impacts on global warming or accounting for the costs that future generations will bear.

How Integrated Reporting will not affect sustainability

Integrated Reports require companies to consider natural and social capital, but an Integrated Report is not a sustainability report.

Sustainability reports typically require businesses to explain more fully how their activities impact societies (e.g. work, health and safety reporting) and natural environments (e.g. recycling and energy use).

In a sense, Integrated Reporting does the reverse: An Integrated Report aims to better explain how society impacts business.

One partial but useful way of thinking about Integrated Reporting is as expanding companies’ balance sheets to better represent how companies depend on non-financial resources, including resources or ‘capitals’ the company does not or cannot own. For example, in an Integrated Report, social capital might reflect how companies’ supply chains and sales depend on a hidden web of trust and goodwill, as well as on its monetary wealth and physical assets.

But an Integrated Reporting ‘balance sheet’ is still organised from the companies’ point of view, rather than from external stakeholders’ view of how the company impacts them. More precisely, an Integrated Report is organised from the point of view of how social, natural and other capitals enable companies to create financial value, especially over the longer term.

So if Integrated Reporting is to improve sustainability, it can’t be in the same way as sustainability reports.

How Integrated Reporting might affect sustainability.

Integrated Reporting might affect sustainability if bringing new types of capital into mainstream business reporting and business models helps to improve how companies interact with their communities and natural environment; such as by being more responsive to harmful effects that are not priced into conventional markets.

Our recent article considers four possible ways that IR could impact natural and social sustainability in this way:

  • By changing how organisations communicate
  • By encouraging integrated thinking
  • By better representing stakeholders’ ‘legitimate interests and needs’
  • By better capturing the long-term impacts of how organisations use resources.

In our upcoming blogs, we will review each of these possibilities in more detail.

If you are interested in being alerted to new posts, please sign up to IGAP’s blog below.

Any comments or thoughts are most welcome.

What promotes confidence and trust in the audit function?

Confidence in the financial reporting of established and emerging firms, the credibility of the audit function and perceptions of audit quality are critical to the success of the Australian economy, argue Professor Nonna Martinov-Bennie and Dr Alan Kilgore from IGAP, in an article published in the October 2012 edition of Think and Grow Rich.

?????????????????????????????????????????????????????????????????????????????Increased Scrutiny of Audit

In the wake of corporate collapses and the Global Financial Crisis,  what actually constitutes a high quality audit has come under public and regulatory scrutiny. This has most recently taken form in the establishment of the Advisory Committee on the Auditing Profession in the United States, and the release of key frameworks and documents internationally, including:

  • the International Auditing and Assurance Standards Board (IAASB)’s consultation paper: A Framework for Audit Quality (2013);
  • the Public Company Accounting Oversight Board’s Strategic Plan: Improving the Relevance and Quality of the Audit for the Protection and Benefit of Investors (2012);
  • the European Commission’s (EC) Green Paper Audit Policy: Lessons from the Crisis  (2010);
  • Audit Quality in Australia – A Strategic Review (2010); and
  • the Audit Quality Framework (2008) in the United Kingdom.

As Martinov-Bennie and Kilgore argue, the credibility of the audit function plays an important role in establishing and maintaining an effective and efficient capital market. There are public and private benefits to these efficiencies: the equitable distribution of investment gains; reliable financial statements that encourage a broader range of investors; and the potential for higher investment returns through reducing financial statement risk.

Key Audit Quality Attributes – The Audit Team

However, as highlighted in a recent study by Kilgore and colleagues, with representative users of audit services (audit committee members, financial analysts, and fund managers), perceptions of quality also play an important role in maintaining trust and credibility in the audit function.

The study established that factors relating to the audit team were perceived to be relatively more important than factors related to the audit firm. More specifically, perceptions of five key audit team attributes were found to be relatively more important than perceptions of audit firm attributes such as audit quality assurance review and audit firm industry experience; namely:

  1. the partner / manager attention to the audit
  2. the manager knowledge of the client industry;
  3. knowledge and experience of the audit team;
  4. communication between the audit team and client; and
  5. the partner knowledge of the client industry.

Only audit firm size was considered relatively more important than these five audit team attributes.

In another project, commissioned by Association of Chartered Certified Accountants (ACCA), Dr Kilgore, Prof Martinov-Bennie and Associate Professor Sue Wright are currently undertaking research on perceptions of audit quality among other stakeholders. Preliminary results suggest that while different stakeholder groups have different views, audit team characteristics remain important to perceptions of audit quality.

Implications and Future Research

The implications of these findings are important at both national and international levels for the audit profession, regulators, and standards setters, and for efforts aimed at improving the effectiveness and integrity of the audit process. These findings are particularly important  for regulatory and professional accounting bodies working to improve audit quality, since they have tended to focus on audit firm factors, in lieu of (perceptions of) audit team expertise and experience. Combined, the findings suggest that not only do different stakeholders have different perceptions of the key drivers of audit quality, but also that audit quality is viewed by market participants as a multi-dimensional construct. In trying to better understand what makes a quality audit, we really need to know more about the people who actually perform them.

Telework to ‘Anywhere Working’: The Next Steps

As reported in the Australian Financial Review, a key theme emerging from the recent Digital Productivity in the Workplace of the Future Conference, sponsored by Macquarie University and CSIRO, was that the conversation is moving on from ‘telework’ from a home office to ‘anywhere working’. Increasingly we will see employees working from locations such as a café, a partner’s, supplier’s or customer’s premises, a smart work centre, a co-working centre, from home, a car, an airport lounge or anywhere that is conducive to achieving the outcomes and levels of productivity required to achieve organisational strategic objectives.

On the latest statistics, around six percent of Australian workers have formal anywhere working arrangements. The statistics on informal arrangements for working from anywhere are more difficult to ascertain. This is an important area for research because workers with informal anywhere working arrangements typically have more autonomy to complete ?????????????????????????????????????????????????????????????????????????????????their tasks and projects, and so this is where we are more likely to see productivity gains.

Clearly not all organisations see anywhere working as an effective strategy, and prefer their employees to work from an office.  Marissa Mayer, CEO of Yahoo, famously (or infamously) banned all work from home arrangements early this year. Ms Mayer argued that innovation and creativity only occurred when people were together. Yahoo are not alone. Google publically stated that their organisation did not condone working from home.

However, several developments may mitigate the limitations of working from home that Yahoo and others have cited. Co-working or collaborative working spaces are providing opportunities for freelancers and entrepreneurs to collaborate and connect. Hub Australia has hubs in Melbourne and Sydney with another to open in Adelaide later in the ?????????????????????????????????????????????????????????????????year.  Fishburners is a co-working space for technology start-ups and has two locations in central Sydney.

Smart work centres (SWCs) provide an alternative for those employees who are unable to work from home for a variety of reasons including social isolation and lack of space. Employers may be more open to employees working from SWCs because these centres can address issues that arise when working from home such as work, health and safety and difficulties in managing remote employees. A sustainable business model will be critical for the success of SWCs, which is another key area for future research.

A second key theme emerging from the conference was the perceived lack of management and leadership for anywhere working employees. Job design should include autonomy so that employees are able to be productive without the constraints of ‘presenteeism’ (being seen in the office). As Dr Blount from Macquarie University discussed on Sky News, management are unclear about how to develop a business case for anywhere working, and are unsure about the skills required to manage workers who are not office-based. While many employers have the HR policies in place for anywhere working, management resistance is an ongoing barrier to an increased uptake of working more flexibly. Alan Dormer – research leader at the CSIRO’s Government and Commercial Services division – has used research from the The Economist to argue that the reluctance of management to devolve responsibility might be preventing significant gains in both worker productivity and well-being.

The Australian Anywhere Working Research Network – which aims to provide a framework for collaborative research on anywhere working – invites any researchers, employers or government representatives interested in this field to join. To become involved, please contact Dr Yvette Blount in the Department of Accounting and Corporate Governance at Macquarie University.