Jeffrey Knapp

The way the Australian Securities and Investments Commission has failed to disclose relevant files on its policy making activities in its 2010 and 2011 six-month file lists  is extraordinary.

Disclosure is falling off a cliff. ASIC file lists include no references to the files that should exist for the development of numerous ASIC policies including market integrity rules, over-the-counter contracts for difference, or substantial holding disclosures. I can’t help but suspect the thinning of ASIC’s file lists may be an attempt by the agency to deny the public its right to request access to documents on agency policy-making under the Freedom of Information Act.

At the ASIC summer school at the Hilton in Sydney last week, the topic of disclosure was one of many being discussed. It is certainly important for these issues to be aired in public, however the discrepancies and omissions in ASIC’s published file lists sets a poor example to the entities it regulates. Indeed ASIC needs to demonstrate leadership in disclosure practices.

This drop off in the file numbers corresponds to a Senate inquiry into liquidators and administrators in 2010. At the time I found that ASIC had removed documents that relate to administrators running collapsed public companies, from its database of those who have been granted exemption from financial reporting.

This was an extraordinary thing for ASIC to do when its governing legislation includes the object of making information publicly available. You’d have thought they would want to keep this information public. They don’t – and I can’t think of a valid reason for ASIC modifying their public database in this way. The regulator is effectively burying information about its policy making.

Mind you, it is hard to find files. If you don’t know an ASIC file exists, then you are hardly in a position of being able to request access to documents from that file.

ASIC’s failures to disclose and be transparent about its files and its accounting exemption orders sets a regrettable example for the rest of the market place.

Jeffrey Knapp is a lecturer in financial accounting at the Australian School of Business.

Andrew Kakabadse

Ask what innovation means and you will get a broad cross-section of responses.  Some interpret innovation as invention.  This was the case at a recent high profile European Commission meeting in Brussels.  One of the notables, visibly irritated with the thinking of his colleagues pointedly remarked, “Each week my department gets nothing but bright ideas and inventions, which go no-where!.  What we need is to get ideas to market.  We need structures that engage.  Let’s not mix invention with innovation!”

All knew he was right.  Equally all recognised the political message in his few words.  European public services are highly politicised.  An innovation policy initiative from the European Commission, making its way through the step by step, tiresome European consultation process could find itself derailed at the final hurdle because some local interest group, or politician, has leverage with country governments or Brussels.  In effect, reform is brought to a halt simply because of some partisan interest.

Not that the Europeans are that much different to the Americans or Australians.  Innovation that would have benefitted the majority is marginalised simply because single political interests dominate big administrations.

So aligning big capital with efficient big government requires clear lines of delineation between the layers of government.  This is one form of innovation.

A second and more profound level of innovation is that of how ideas are shaped and become the emergent policy of countries or even whole regions.

Globally, there is a seeming acceptance that the citizen is best served by policies anchored in the free market philosophy.  Why such adherence to shareholder capitalism from both the right and left wing of the political landscape, especially from the Anglo American economies?  One reason is the subtle shaping of mindset occurring ‘behind the scenes’ by global networks, such as the most prominent of all, the Bilderbergs.  Recent study of this trans-Atlantic gathering of business and political grandees, highlights the free market thinking that ouses from the Bilderberg meetings.

Yet rather than religiously pounding this one philosophy, the Bilderberger study interviewees referred to the understanding that arises from attracting a divergence of views.  True, the investigation shows that the demographics of the attendees is broad.  But the question to ask is whether their ontology is comparable and deeply shared?  The evidence suggests it is, of course, in favour of shareholder market economics.

The shaping of mindsets particularly in favour of the free market economy is subtle in its creep.  It has many of the world’s leaders blind to the advantage of socialised capital, the predominant philosophy driving Germany, Scandinavia and China.

Thus, innovation on a global basis is at the crossroad – do we pursue short term, transactional shareholder capitalism or longer term, socialised capital for the purposes of the public good?  The fact that we do not openly and enthusiastically debate this issue is testament to the smart power influence of networks as the Bilderbergs.

In the short term there is likely to be no fundamental shift in the repositioning of capital.  On this basis there is equally likely no change in the structure and functioning of government.  The major governments of the globe operate exactly as the opaque vested interests desire.

No innovation in terms of policy design means we are left with innovation meaning invention.  With innovation at the global crossroad, we can expect a future of many bright ideas but with very few actually reaching the citizen.

Andrew Kakabadse is a consultant and professor of international management development at the Cranfield University School of Management.