ANNUAL REVIEW - Australian Centre For Financial Studies

More documents

Recommendations

Info

Public Companies being taken private: a research report into private equity DAVID MICHELL CASE STUDY 3 10 In 2008 the Melbourne Centre for Financial Studies was contracted by The Australian Council of Superannuation Investors (ACSI) to conduct a study into the key governance issues arising from recent private equity activity. During 2006 and 2007, large debtfunded bids to privatize a number of major public companies (such as Qantas, Coles and Alinta) prompted shareholders to question the governance arrangements for such bids. Areas of concern were scope for ‘owner-agent’ conflicts of interest and the possibility that private equity bidders were being advantaged over the company’s existing owners in their access to information. ACSI’s intention in commissioning this study was to provide some guidelines which would assist boards to improve their governance practice and ensure that existing shareholders did not unnecessarily surrender value to PE bidders. ACSI members manage $250 billion on behalf of 5 million superannuation fund members. ACSI provides independent research and advice to its member funds on environmental, social and corporate governance investment risk. Lead investigator for the project was Dr Chander Shekhar, Senior Lecturer, Department of Finance at University of Melbourne who has published widely in corporate governance field. His co-author was David Michell of MCFS, who has previously worked as a portfolio manager and company secretary. Research assistance was provided by Ewa Krawiec of MCFS, and University of Melbourne post-graduates. The work is expected to provide a basis for future academic publications. The MCFS research report ‘Public companies being taken private’ reviews academic literature, analyses Australian and international case studies, and applies finance theory to the specific questions raised when public companies are subject to bids intended to take them into private ownership. Key issues were information asymmetries between bidder and existing shareholders, the role of executive and nonexecutive directors in companies subject to the bids, director and manager remuneration pre and post bid, and the identification and mitigation of conflicts of interest for these two groups. Key outcomes of the research are a set of Guidelines and a Code of Conduct which have been adopted by ACSI. Guidelines for company boards subject to PE bids may be summarised as: 1. Target shareholders must be given a reasonable opportunity to consider and decide on any bid that involves a change of corporate control. 2. The target board must ensure that the bidder does not have any advantage in information quality and quantity over target shareholders. 3. An independent board committee, led by non-executive directors and excluding any participating insiders, must control all aspects of the takeover including setting limits on insider participation, disclosing identity of insiders, and incentives offered to them. Additional guidelines were developed for participating insiders, investors and nonexecutive directors. A copy of the Report including Guidelines and Code of Conduct is available at www.acsi.org.au and www.melbournecentre.com.au.
The people behind MCFS PROFESOR KERYN CHALMERS AND PROFESSOR PAUL KOFMAN MCFS Board SYD BONE became the independent Chairman of MCFS in May 2009. Formerly CEO of Victorian Funds Management Corporation, Syd brings with him a strong resume of local and international experience. Syd is a Director of the International Centre for Pension Management and is a member of Victorian Finance Industry Council. PROFESSOR KERYN CHALMERS represents Monash where she is Head of Department of Accounting and Finance at Monash University. Professor Chalmers has been in academia since 1987 and prior to joining Monash in 2003, held positions at The University of Melbourne and Victoria University. ANTHONY DURAKOVIC is Executive General Manager, AAMI. Anthony joined AAMI in 1994 and was appointed Executive General Manager in October 2007. Anthony represents AAMI, a Suncorp company headquartered in Melbourne, on the Board, a corporate sponsor of MCFS. MARTIN FAHY is Chief Executive Officer of Finsia and was formerly Director for Asia Pacific for the Chartered Institute of Management Accountants where he led CIMA’s expansion in the region. Finsia is a founding consortium member and provides a direct line to 17,000 financial service sector members. PROFESSOR PAUL KOFMAN represents the University of Melbourne where he was appointed as Professor of Finance at the University of Melbourne in 2001 and became Head of the Department in January 2006. Paul has worked at Erasmus University in Netherlands, Monash University, UTS and UNSW. PROFESSOR TONY NAUGHTON represents RMIT where he is a Professor of Finance has been Head of the School of Economics and Finance since 2003. Tony has worked at the universities of Leeds, Birmingham, Wollongong, New South Wales and Griffith. MCFS Staff DIRECTOR: PROFESSOR DEBORAH RALSTON is a Professor of Finance at Monash University and has been with MCFS since January 2009. Deborah has held a number of senior university appointments most recently pro Vice Chancellor at the University of Canberra and her research interests include the impact of financial regulation, the strategy and management of financial institutions and regional economic development. ph: (+61) 03 9666 1010 deborah.ralston@melbournecentre.com.au RESEARCH DIRECTOR: PROFESSOR KEVIN DAVIS is professor of Finance at Melbourne University. Kevin was the founding Director of MCFS from June 2005. His primary research interests are in the areas of financial institutions and markets, financial engineering and corporate finance. He is co-author/editor of 16 books in the areas of finance, banking, monetary economics and macroeconomics, and numerous journal articles and chapters in books. ph: (+61) 03 9666 1050 kevin.davis@melbournecentre.com.au BUSINESS DEVELOPMENT MANAGER: DAVID MICHELL. Having started in retail banking, David has worked as an economist, a portfolio manager (asset allocation) and a professional association technical director. ph: (+61) 03 9666 1012 david.michell@melbournecentre.com.au RESEARCH FELLOW: JOHN FOWLER. Having had a long career in corporate finance roles culminating as CFO of CUB and Fosters Asia, John has since worked as a management consultant and financial researcher. ph: (+61) 03 9666 1011 john.fowler@melbournecentre.com.au RESEARCH ASSISTANT / ADMINISTRATIVE OFFICER: EWA KRAWIEC ph: (+61) 03 9666 1050 ewa.krawiec@melbournecentre.com.au MCFS BOARD AND STAFF 11
Page 1 and 2: ANNUAL REVIEW 09
Page 3 and 4: Striding towards its mission SYD BO
Page 5 and 6: Melbourne Mercer Global Pension Ind
Page 7 and 8: Melbourne Financial Services Sympos
Page 9: 2008-09 EVENTS AND CONFERENCES 2008
Page 13 and 14: Australian Equities Database The Me
Page 15 and 16: CONSORTIUM PARTNERS INDUSTRY BRIEFI

ANNUAL REVIEW - Australian Centre For Financial Studies

Create successful ePaper yourself

Delete template?

Save as template?