Is there a governance failure in corporatised Australian Government Business Enterprises? Evidence from their Chief Executive Officers’ compensation.

Pazmandy, G; Bugeja, M; Matolcsy, Z

Is there a governance failure in corporatised Australian Government Business Enterprises? Evidence from their Chief Executive Officers’ compensation.

Pazmandy, G

Bugeja, M

Matolcsy, Z

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Publication Type:: Conference Proceeding
Citation:: 2018
Issue Date:: 2018-12-06

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Field	Value	Language
dc.contributor.author	Pazmandy, G https://orcid.org/0000-0001-5452-8298	en_US
dc.contributor.author	Bugeja, M https://orcid.org/0000-0002-1941-5092	en_US
dc.contributor.author	Matolcsy, Z	en_US
dc.date.issued	2018-12-06	en_US
dc.identifier.citation	2018	en_US
dc.identifier.uri	http://hdl.handle.net/10453/130621
dc.description.abstract	Over the last three decades, governments have commercialised and corporatised many of their government business enterprises (GBEs) without privatising them under New Public Management (NPM) policy, which requires them to act as a corporate sector entity. These GBEs have independent boards that are responsible for the corporate governance of these entities, including the hiring of chief executive officers (CEOs) and determining their compensation. We examine the association between pay and performance for CEOs of GBEs and find that the levels and changes in CEO compensation are not associated with GBE performance despite being the explicit intent of NPM and regulatory policy. We suggest that this corporate governance failure could be due to the composition of the GBE boards. Our evidence shows that only 11.29% of directors appointed have public listed company experience with the balance of director appointments, being either senior public servants or political appointments who may lack the motivation or have any incentive to closely monitor CEO compensation. Accordingly, we suggest some possible policy changes to both the determination of CEO compensation and the composition of GBE boards.	en_US
dc.title	Is there a governance failure in corporatised Australian Government Business Enterprises? Evidence from their Chief Executive Officers’ compensation.	en_US
dc.type	Conference Proceeding
utslib.location.activity	Australia	en_US
pubs.embargo.period	Not known	en_US
pubs.organisational-group	/University of Technology Sydney
pubs.organisational-group	/University of Technology Sydney/Faculty of Business
pubs.organisational-group	/University of Technology Sydney/Faculty of Business/Accounting Discipline
utslib.copyright.status	open_access
pubs.consider-herdc	false	en_US
pubs.publication-status	Unpublished	en_US

Abstract:

Over the last three decades, governments have commercialised and corporatised many of their government business enterprises (GBEs) without privatising them under New Public Management (NPM) policy, which requires them to act as a corporate sector entity. These GBEs have independent boards that are responsible for the corporate governance of these entities, including the hiring of chief executive officers (CEOs) and determining their compensation. We examine the association between pay and performance for CEOs of GBEs and find that the levels and changes in CEO compensation are not associated with GBE performance despite being the explicit intent of NPM and regulatory policy. We suggest that this corporate governance failure could be due to the composition of the GBE boards. Our evidence shows that only 11.29% of directors appointed have public listed company experience with the balance of director appointments, being either senior public servants or political appointments who may lack the motivation or have any incentive to closely monitor CEO compensation. Accordingly, we suggest some possible policy changes to both the determination of CEO compensation and the composition of GBE boards.

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http://hdl.handle.net/10453/130621