Course Coordinator and Lecturer

Dr Francesco de Zwart

Office: Level 2, Room 218, Ligertwood Building
Phone: (08) 8313 8304
Email: francesco.dezwart@adelaide.edu.au 

On successful completion of this Course students will be able to:

1.  Identify, critically analyse and apply to factual situations the principal duties of company directors and officers under the Common Law and Equity (together, the 'General Law') and the Corporations Act 2001 (Cth) including:

• The duty of care, skill and diligence
• The duty of loyalty (the 'no profit' rule and duty to 'avoid conflicts of interest') and the duty not to misuse position or not to misuse information
• The duty to act bona fide (in good faith) in the best interests of the company
• The duty to act for a proper purpose
• The duty to avoid insolvent trading under the Corporations Act 2001 (Cth) section 588G
• The remedies, sanctions and penalties for breaching directors' duties
• Ratification of breaches of directors' duities
• Court relief for breaches of directors' duties

2. Identify, critically analyse and apply the principal ‘law and economics’ theories and models of the firm relating to the separation of ownership from management and the role of corporate governance in for-profit firms and banks including:

• How the pre-eminent models balance the interests of ‘insiders’ and ‘outsiders’ to the corporation
• The ‘nexus of contracts’, agency costs and the Shareholder Model
• The shareholder wealth-maximisation principle
• The shareholder primacy model of corporate governance
• The stakeholder model of corporate governance and
• The director primacy model of corporate governance

3. Identify, critically analyse and apply how these theories and models were undermined in the case of corporate collapses like Enron and Hastie and the APRA Prudential Inquiry into Commonwealth Bank and the Hayne Royal Commission on Banking Misconduct including:

• The structural features of the Enron and Hastie corporate collapses and of banks in pre- and post-GFC times and how they operated at the relevant time and
• The lessons they provide for regulators, policy-makers, law reformers and corporate actors relating to the sustainability of the corporation or major bank.

4. Identify and be able to critically analyse the regulation of corporate governance through the ‘soft’ law mechanism of international/cross-border governance codes and schemes of practice including:

• The Governance Variables which have developed over time and across sectors (international/cross-border and national as well as for-profit firms and major banks) to form the central planks of Governance Codes and schemes for for-profit corporations and Australian major banks

5. Identify, critically analyse and apply how individual 'Governance Variables' (governance mechanisms, processes and protocols) operate in the real world to enhance or reduce the effects of corporate actors such as the board, individual directors, the CEO and management on shareholder wealth measures such as firm value/share price, firm operating performance/profit and the probability of earnings manipulation including:

• The effectiveness of individual corporate Governance Variables in affecting the long-term efficiency and sustainability of the for-profit corporation and Australian major bank
• The factors that intervene to reduce the operation and effectiveness of these corporate Governance Variables
• The relative importance of individual corporate Governance Variables inter se in reducing (or increasing) agency costs and enhancing (or reducing) the long-term efficiency and sustainability of the for-profit firm and Australian major bank and
• Core failures of corporate governance for banks – incentives, corporate/bank and risk culture, technology, board structure, composition (independence emphasised at the expense of expertise) and processes and risk identification, assessment, control/management, reporting and escalation. These were exacerbated by complex and opaque bank structures and securitised products.

6. Apply knowledge of the above corporate governance theories, corporate collapses, governance code regulation, behaviour of individual Governance Variables and misconduct in the banking industry that underlie corporate governance regulation to assess and propose solutions for corporate governance problems for for-profit firms and Australian major banks.

7. Communicate factual, structural, economic and legal issues in relation to corporate governance arrangements and problems.

Students are required to purchase the following:

1. Francesco de Zwart, Enhancing Firm Sustainability Through Governance, The Relational Corporate Governance Approach, (Edward Elgar Publishing, Cheltenham, UK and Northampton, MA, USA, 2015) available at https://www.e-elgar.com/shop/gbp/enhancing-firm-sustainability-through-governance-9781784715519.html

Students should also consult the Law Library e-copies of:

1.  Phillip Lipton, Abe Herzberg and Michelle Welsh, Understanding Company Law, 21st Ed, Lawbook Co, Thomson Reuters, 2022.

2.  Francesco de Zwart, The Key Code and Advanced Handbook for the Governance and Supervision of Banks in Australia, Vols. 1 and 2, Springer, 2022.

• Francesco de Zwart, The Key Code and Advanced Handbook for the Governance and Supervision of Banks in Australia, Vols. 1 and 2, Springer, 2022, available at: https://link.springer.com/book/10.1007/978-981-16-1710-2
• Ian M Ramsay, Company Directors, Principles of Law and Corporate Governance, 2nd Ed, LexisNexis, 2023
• Ross Grantham, The Law and Practice of Corporate Governance, 2nd Ed, LexisNexis, 2023

LEARNING AND TEACHING MODES
[Pedagogical approach, learning and teaching approach, including e-learning and blended learning, use of technology to enhance learning]

2-Hour Lecture and 1-Hour Seminar/Workshop per Week

The information below is provided as a guide to assist students in engaging appropriately with the course requirements.

In this course, each student will receive one 2-hour lecture and one 1-hour seminar/workshop for a total of 3 hours of contact time per week. It is essential to realize that the University expects full-time students (that is, those taking 12 units per semester) to devote a total of 48 hours per week to their studies.

As this is a 3-unit subject, a student should devote approximately 12 hours to it a week (obviously this is an average figure, as some weeks will be very busy with the student group research assignment and oral presentation or preparing for the Final Examination, while other weeks will be less busy). As students can see, the total contact hours per student totals 3 hours per week. Therefore, a student in this course would be expected to do approximately 9 hours work per week for this course in addition to the lectures and seminar/workshops times. It is very important that students begin working on their own (in addition to attending the lectures and seminar/workshops) from the very start of this course. Without doing this, students are compromising their own learning outcomes.

Summary of Learning and Teaching Activities

Week	Topic	Contents
Weeks 1 - 2	The duties of directors and company officers under the Common Law and Equity (together, the 'General Law') and the Corporations Act 2001 (Cth)	• The duty of care, skill and diligence • The duty of loyalty (the 'no profit' rule and duty to 'avoid conflicts of interest') and the duty not to misuse position or not to misuse information • The duty to act bona fide (honestly, in good faith) in the best interests of the company • The duty to act for a proper purpose • The duty to avoid insolvent trading under the Corporations Act 2001 (Cth) section 588G • The remedies, sanctions and penalties for breaching directors' duties • Ratification of breaches of directors' duities • Court relief for breaches of directors' duties
Week  3	Session 1: The Challenge of Corporate Governance	• An introduction of the separation of ownership from management and the role of corporate governance • Separation of ownership, ‘nexus of contracts’, agency costs and the shareholder primacy model • ‘Core’ areas of corporate governance and corporate failures • The ‘Key Fields’ of the Relational Corporate Governance Approach
	Session 2: Introduction to the framework of the Relational Corporate Governance Approach	• Overview of the firm-specific (micro) and macro-economic benefits of ‘good’ corporate governance • The components of the Relational Corporate Governance Approach • Introduction to the Governance Variables • Introduction to the Governance Factors • Interrelationships between the Governance Factors • Operational measures of the Relational Approach – governance variable ‘coverage’ and ‘relational proximity rating’
	Session 3: Steps for Legal Researching	• Possible areas of topics for the student group research assignment and oral presentations • Student group research assignment and oral and presentation guidelines and suggestions • Rubric for assessment
Week 4	Session 1: Key Field No. 1	The Application of the Principal theories of the firm
	Session 2: Key Field No. 2	Case studies of the Enron (USA) and Hastie (Aus) Corporate Collapses
	Session 3: Key Field No. 3	Comparative corporate governance codes of the major cross-border/international and national sectors of the US, UK and Australia
Week 5	Session 1: Empirical Studies Key Field No. 4 – Part 1 – National shareholder protection scheme and Board Factors 1	• Firm-specific effects of ‘good’ corporate governance – firm value and operating performance • ‘overall’ governance structure and the level and strength of the national shareholder protection regime • Board Factors I – ‘independence’, the proportion of non-executive/independent directors and the effects of equity ownership
	Session 2: Empirical Studies Key Field No. 4 – Part 2 – Board Factors 2 and other firm-specific variables	• Board size and outside board positions • Anti-takeover mechanisms and the market for corporate control – whole board and staggered board elections • Audit sub-committee – presence, independence and expertise • ‘Block’ and institutional shareholdings • Division in the CEO/Chairperson roles
	Session 3: Empirical Studies Key Field No. 4 – Part 3 – Board and audit committee factors and earnings manipulation	• Principal aim of reporting – to reduce information asymmetry and agency risk • Transparency and the ‘trade-off’ effect on the quality of board and market monitoring
Week 6	Session 1: Empirical Studies Key Field No. 4 – Part 4 – ‘Good’ corporate governance and director, CEO and management compensation
	Session 2: Key Field No. 5 – Governance of Banks in the GFC and Beyond	• Government, Regulatory, Bank and Industry Body Reports and Publications • ‘Core’ and ‘Emerging’ Themes • Non-Financial Risk Definitions and Major Risk Classes • ‘Key Groupings’ of Governance Variables • Key Questions and Core Failures in Bank Governance • ‘Securitisation’ of Mortgage-backed Securities • Overview of multiple governance failures in banks
	Session 3: Distinguishing Features of Banks for the Relational Approach	• Similarities and Differences with the Enron Collapse • Maturity of Debt, Liquidity, Leverage and the Interconnectedness of Banks • Deposit Insurance, Government Bailout and Risk-taking • Systemic Risk • Conflicts of Interest • Perceived Weaknesses in Governance Codes
Week  7	Session 1: Maximising the ‘Default Standard’ of Shareholder Value	• Should the Shareholder Wealth-Maximisation Principle Apply to Banks and Financial Firms?
	Session 2: Bank-Specific Coverage and Relational Proximity Results for Australian Banks	• ‘Key Groupings” of Governance Variables for Australian Banks
	Session 3: Issues in Executive Compensation and Accountability – incentives, Bonuses, Equity and Option Compensation and the Financial Accountability Regime (FAR)
Week 8	Session 1: Boards and Committees, Independence, Expertise and Bank and Risk Culture
	Session 2: The Governance and Management of Bank Risk, Risk Appetite and Risk Culture
Week 9	Student Group Research Assignment Oral Presentations Part 1
Week 10	Student Group Research Assignment Oral Presentations Part 2
Week 11	Student Group Research Assignment Oral Presentations Part 3
Week 12	Session 1: Revision Lecture for Final Examination
	Session 2: Q & A Session for Final Examination

1. Lectures and Seminar/Workshops Not Compulsory but Strongly Advised

It is NOT compulsory to attend the 2-hour lecture and 1-hour seminar/workshops. However attendance is strongly advised.


2. Redeemable Grades

NONE of the assessment tasks/pieces are redeemable

Reseach-Driven Inquiry, Organisation, Learning and Assessment Tasks

The Course Coordinator has read "Commonly known, commonly not known, totally unknown: a framework for students becoming researchers" by John Willison and Kerry O’Regan, Centre for Learning and Professional Development, University of Adelaide, South Australia, accessed 11 April 2016 at:
http://www.adelaide.edu.au/rsd/framework/explanation/video/  
(final and definitive form published in the Higher Education Research and Development 26(4)December 2007 pp393-409)


Three forms of assessment are the building blocks for the development of the student’s skills. Each form requires students to embark on an inquiry which:

- needs the student to determine the nature, source, form and breath of knowledge/understanding pertaining to the assessment task

- use appropriate methodology to find or generate information/data in a form suitable to produce the research output required by the assessment task

-to organise the information collected/generated so it may be logically synthesised for critical evaluation

- develop critical evaluation skills (beyond mere descriptiveness) to address the assesssment criteria

- communicate factual, structural, economic, legal and ethical issues in relation to corporate governance arrangements and problems


1. STUDENT GROUP RESEARCH PAPER (50%)

Student-Groups must submit a research paper (of no more than 2,500 words) which must be submitted electronically by 2.00pm on the Friday of the First Week of the Mid-Semester Break. The topic of the Research Paper must be the same as the Group Oral Presentation below. 

The mark awarded for the Student Group Research Paper is 50% of the total mark for the Course.

Students must submit this assessment piece as a group assignment (up to 4 people in a group) where all group members will be awarded the same mark. All students must sign up (self-select) into a group via MyUni by the end of Week 5.

Placement into a group is a straightforward process. Students can do this by clicking on the ‘people’ Tab (left hand side of the MyUni Course Page), clicking on the Tab labelled ‘Student-Group Research Paper’ and adding the student name to an available Group Number. Students must communicate with each other before placing themselves into an existing group. A communication discussion forum for this purpose is available in the Course Page ‘Discussion’ Tab.

Please note that a formal process will be available to address any issues relating to the contribution to the group of each member. More details will be provided with the student-group research paper task sheet.

The Student-Group Research Paper (on the same topic as your group oral presentation) will also be marked in accordance with the grade descriptors below. Legal and/or theoretical content, depth of analysis, quality of research and quality of written communication will all be relevant to the assessment. The research paper must be in essay form.  The research paper must be properly referenced (see below).

Assessment criteria for Student Group Research Paper:

- development of logically compelling thesis
- level of insight and innovative thought
- depth of analysis and level of critical examination of the issues raised
- clarity of expression
- logical planning and sequence
- evidence of comprehensive research and consideration of the relevant literature
- demonstrated understanding of relevant legal materials
- demonstrated ability to critically evaluate and synthesize information and existing knowledge from a number of sources and experiences.
- correct application of relevant material
- overall presentation, including use of correct grammar, spelling and punctuation
- use of resources in formulating the paper including proper acknowledgment and correct referencing.


The Student Group Research Paper is NOT redeemable.


2. STUDENT-GROUP ORAL PRESENTATION (10%)

Student-Groups will be asked to make a 15-minute oral presentation during the 2-hour lecture and 1-hour seminar/workshop time in Weeks 9-11 on the same topic as the Student Group Research Paper.

Each presentation should take 15 minutes and be based on thorough research.

Presentations are worth 10% of the total mark for the subject .

The Student-Group Oral Presentation will be marked in accordance with the grade descriptors which are set out in this course outline. Legal and/or theoretical content, depth of analysis, quality of research and presentation skills will all be relevant to the assessment. Students are encouraged to discuss their presentation format with the course coordinator in advance, and facilities can be made available for PowerPoint slides etc.

Assessment criteria for presentation

- development of logically compelling thesis
- level of insight and innovative thought
- depth of analysis and level of critical examination of the issues raised
- clarity of expression
- logical planning and sequence
- evidence of comprehensive research and consideration of the relevant literature
- demonstrated understanding of relevant legal materials
- demonstrated ability to critically evaluate and synthesize information and existing knowledge
from a number of sources and experiences.
- correct application of relevant material
- overall presentation, including speed of delivery, clarity and any visual aids

Oral feedback on your Presentation will be given on the day of your Presentation. You will also receive written feedback before the Final Examination.

The Group Oral Presentation is NOT Redeemable.


3. FINAL EXAMINATION (40%)

2 HOURS

To be scheduled in the University End of Semester Examination period.

The Final Examination is NOT redeemable.

1. STUDENT-GROUP RESEARCH PAPER (50%)

Submission process, late submission penalty and word length penalty for Student Group Research Paper

Submission process for Student-Group Research Paper: You will be informed of all submission procedures when the reasearch paper is announced. Where possible, student-groups will be requested to submit a copy of their assignment through Turnitin on MyUni. By submitting a copy of your assignment through Turnitin you are agreeing to the following: (a) I declare that all material in this assessment is my own work except where there is clear acknowledgement and reference to the work of others. I have read the Policy on Cheating in Examinations and Related Forms of Assessment. I have also read the University's Plagiarism Policy; (b) I give permission for my assessment work to be reproduced and submitted to other academic staff for the purposes of assessment and to be copied, submitted and retained in a form suitable for electronic checking of plagiarism.

Late submission penalties for Student-Group Research Paper: When an assessment is submitted after the due date, without an extension, 5% of the total mark possible will be deducted for every 24 hours or part thereof that it is late, including each day on a weekend and public holidays. For example, an essay that is submitted after the due date and time but within the first 24 hour period, and that has been graded at 63%, will have 5% deducted, for a final grade of 58%. An essay that is more than 24 hours late will lose 10%, etc.

Word length penalties for Student-Group Research Paper: 5% of the total mark possible for a written assssment
will be deducted for every 100 words (or part thereof) by which it exceeds a stipulated word limit. For example, a 3,000 word essay graded at 63% will have 5 % deducted if it is between 3,001 and 3,100 words long for a final mark of 58%. If the essay is between 3,101 and 3,200 words long, 10 % will be deducted for a final mark of 53%, etc. Word limits include all words in the text, in headings, in quotations, but exclude citations in footnotes. Any separate cover page, table of contents, bibliopgraphy or list of sources is excluded from any word limit. If the word limit is misstated, this may be regarded as academic dishonesty.

Style of written work for Student-Group Research Paper: All written work in the Law school is required to comply with the approved Law School style guide, the Australian Guide to Legal Citation, 4th Edition available electronically at: https://law.unimelb.edu.au/mulr/aglc/about.