Private Finance Initiative (PFI) has successfully transformed the management of public sector construction projects by minimising construction risks and delivering projects with higher certainty in the time, cost, quality, and customer satisfaction than is with the counterpart traditional approach. The success rests in the principles of better Value for Money (VfM) demonstrated through the focus on whole-life costs and quality as the measure for economic, effective, and efficient procurement of the private sector and the delivery of the project and services thereafter. However, PFI has not addressed in full the expectation to provide better VfM due to uncertainties in the estimated project costs and persistent decrease in the specified client requirements as the project advances in the procurement process; hence, attracting distrust and resistance to the initiative. This highlights the need for a new approach to ensure that VfM is not only demonstrated at a point of procurement, but also monitored and sustained over the whole PFI contract period. This research explored the exposure of PFI projects to VfM uncertainty and developed a VfM Optimisation and Sustainability (VaS) model as it main scientific contribution. The developed model works abreast a Process Map, Taxonomy of uncertainty factors, and VfM Simulation and Monitoring Templates to define and develop VfM processes, create VfM, assess and test for its robustness, and sustain it through the entire project life. The model follows from a systematic analysis of the current practice and the uncertainties it creates. The analysis based on an empirical research that adopted a mixed-methods approach involving healthcare and transport PFI projects. The model was evaluated by experts from PFI projects and academics and by using simulation case studies. Adopting the model has the potential to improve the delivery of VfM through optimization of the benefits and costs during the project appraisal process, monitor and sustain VfM during the operating phase, and utilise lessons learnt for improvements in the future.

This thesis studies the relationship between corporate governance and firm performance in the context of U. S. institutions. The aim of the thesis is to contribute to its field of research from a mainly Transaction Cost Economics (TCE) perspective. Hence, this thesis is not a direct contribution to Agency Theory (AT) which has been the dominant paradigm in the field of corporate governance and firm performance up to this day. However, given that most of the relevant research in this area of study has been, for the last thirty years, conducted using AT, this thesis starts with a critical appraisal of this literature and a statement of the reasons why AT is not employed. The thesis's critical review of AT identifies important problems. A key issue is that the field is divided in two camps, both of which rely on AT, which nevertheless reach diametrically opposed conclusions: while one group of researchers finds a significant relationship between corporate governance and firm performance, an opposing faction argues that no such relationship exists. This thesis criticizes this literature by (a) arguing that the conflicting results are the consequence of. not applying the different AT theories to the class of phenomena they were designed to explain (b) by showing that part of the extant research is in a pre-theoretical stage, and (c) by mustering the arguments of AT theorists who have stated that some of their own work is flawed. It is because of these pitfalls in AT that this thesis is designed to contribute to the field of corporate governance and firm performance from a mainly TCE perspective. Starting with the TCE approach to corporate governance, this thesis uses insights taken from a lifecycle theory of the firm to fill in gaps in TCE concerning the issue of bilateral dependency between a firm and its shareholders. Thus, a key contribution of the thesis is a new model which explains how corporate governance changes as the firm matures and the effects of such changes on firm performance. The model is then tested for empirical validity at which stage additional important contributions are made, especially, a new measurement of firm financial autonomy, the "A-index", is developed. Moreover, an entrenchment index currently available in the literature is employed, and investment performance and firm valuation are measured employing marginal q and Tobin's q respectively. The empirical results provide statistically significant evidence in favour of the predictions of the model. The thesis concludes that the new combined theory is an important contribution to positive economics and finance: the theory states clear, testable, predictions which are supported by the data

The purpose of this study is to analyse the structure and role of boards of directors of large UK companies over the period 1998 to 2004, focussing on the changes through time in their structure, their meeting frequency, the remuneration of the non-executive directors and the determinants of their decision to pay dividends or to retain earnings. Despite a wealth of predominantly US literature on boards of directors, and the various changes in board structure in the UK brought about by differenct codes, there is little evidence about the role, composition and structures of UK boards. There is also relatively little information that can be examined to determine whether board rooms, that perhaps have similar broad numbers of nonexecutive directors and executive directors, make different decisions based upon their unique demographics information. How have the UK's boards of directors recently evolved to meet new challenges? The majority of UK pension funds are invested in shares of UK listed firms and with the FTSE 100 equal to more than 80% of total market capitalisation, the boards of directors of the largest firms are of critical importance to much of the UK public's future livelihood. These large firms, by definition, are leading GDP and export contributors for the UK, most likely to face off with global competitors, and also support large numbers of employees contributing to local communities and tax revenues. I study annual report data, particularly that available in the corporate governance sections, for demographic, compensation and activity based details. I examine the evolution of large UK boards for evidence of changes that occurred endogenously and some of those that were the focus of Higgs (2003) and the Combined Code on Corporate Governance (2003). It is important to note that much of the UK literature on board of directors' details is in cross-sectional form using one year or two year samples (Singh (2004), Lasfer (2004), MORI-Higgs (2003)) which is informative but does not provide significant information on boards' evoluation through time. This study extends the literature on boards by focusing on board details beyond those basic numbers now mandated or indirectly imposed by corporate governance bodies (the Financial Reporting Council, London Stock Exchange, or the SEC and NYSE). It sheds light on trends that are likely to continue and on trends that may have a greater influence on board decisions in years to come. I, particularly, note the dramatic increase in the representation of non-UK nationals and the stable representation of women on UK boards of directors. However, I show that, in both cases, increased representation is largely only among non-executive, not executive, directors. The study also finds that despite more public attention to boards of directors, more foreigners and marginally more women, and quicker turnover, the average age of non-executive directors (58) and executive directors (50.5) remained relatively constant over the sample period. Through various forms of analysis, I found that boards organised their full meetings largely around the number of foreign nationals on the board - more foreign members substantially reduced the frequency of board meetings -a factor that was ever more visible with increased foreign representation on boards. I also find that boards of directors utilised market capitalisation as their major consideration of non-executive directors' remuneration, beyond financial performance. The use of market capitalisation also appears to coordinate with the increased reliance of remuneration consultants - advisors that were most unlikely to be able to evaluate the demands and achievements of boards. These consultants seemingly influenced the pay of non-executive directors to follow measures of market size (when this increases) but not necessarily firm performance implying that board performance and reward were more tied to largesse than shareholder value. Finally, I show that board demographics and remuneration characteristics influence dividend decisions - particularly factors that do not appear to have been studied before in relation to dividends. My empirical evidence suggests that larger boards may exert a restraining influence on dividend changes, older executives may increase dividends in order to reduce firm risk, and that executives may financially benefit from increased dividend payments during poor performance - finding specifically that amongst firms suffering declining earnings performance CEO remuneration changes are positively correlated with dividend increases whilst corporate governance guidelines instruct remuneration to be aligned with firm performance. My study has substantial policy implications for governments and the investment community demonstrating that specific board of directors' characteristics may influence positive or negative corporate finance decisions or economic behaviour thus potentially suggesting to regulators and investors that the board structure of the largest companies in the UK over the sample period was not likely to mitigate the agency conflicts between shareholders and managers.

This dissertation consists of three essays which examine the real economic impact of the financial reporting environment. In Earnings Volatility and Market Valuation: An Empirical Investigation, I use data on a large cross-section of US firms from 1973 to 1998 to address the issue of whether there is a systematic link between the market value (as proxied by Tobin's q) of a company and the volatility of its quarterly earnings stream. Using a multivariate regression framework, and controlling for other factors which prior literature has shown to be related to q, I find a strong, negative relationship between market value and earnings volatility. The relationship remains after controlling for cash now volatility indicating that (as asserted by corporate management) "accounting-induced" earnings volatility has an adverse impact on market value. In Accounting for Derivatives and Corporate Risk Management, I consider the question of how non-financial corporations should report the results of their use of financial derivatives. Using SFAS 133 as a framework, I introduce three possible accounting regimes and characterize the information provided under each of the three alternatives. I then present a simple economic model with which to analyze the effect on corporate risk management policies of the different regimes and find that hedging distortions may occur depending on the regime imposed by the regulatory authorities. Finally, I discuss the policy implications of this result. In The Economic Consequences of Purchase and Pooling Accounting (co-authored with Henri Servaes),w e investigate the market reaction to various announcements by the FASB and SEC regarding the potential abolition of pooling accounting, the preferred method of corporates for accounting for business combinations. Our results indicate a negative reaction to announcements which increase the probability of such an abolition and are consistent with the hypothesis that investors are to some extent fixated on reported earnings.

It appears that environmental issues are becoming a source of competitiveness and that many leading Organisations are realizing the bottom line benefits of implementing environmental management practices (EMPs). Consequently, environment management (EM) is regarded as a component of improving business performance, and implementing EMPs can often provide an opportunity to improve business performance in the hotel industry. However, little evidence shows how to measure and monitor EMPs to improve environmental performance. Although accounting has received considerable attention in the literature as a potential factor with a positive influence on improving environmental performance, there is little evidence regarding the role of accounting in enhancing environmental performance and the lack of empirical research into this link is a key research gap. An exploratory approach via case study is taken, in order to investigate insights into how managers control and monitor EMPs to improve environmental performance in hotel Organisations. Triangulation methods are employed to explore relationships between environmental performance and accounting practices through investigating how relevant accounting information and techniques assist in controlling and monitoring EMPs. The study uses data triangulation, in other words the use of more than one method of data collection (documents, archive records, and semi-structured interviews), to ensure the reliability of results. The findings show that traditional accounting systems offer little in the way of opportunity for facilitating EMPs and improving business performance. This study suggests that the monitoring and measurement of practices could assist managers to continuously improve environmental performance. Most importantly, benchmarking and promoting environmental improvement efforts need to be in alignment with the Organisation's longer-term environmental objectives and business strategy. Moreover, the lack of any accounting technique to quantify the relationship between environmental and financial performance has hindered the ability of management to gain more detailed information with a view to improving business performance. Further to this, without knowledgeable employees, the adoption of environmental management systems (EMS) and monitoring of environmental performance could be expensive and also difficult to sustain in the longer term. Therefore, it is important to seek ways to monitor EMPs and improve business performance. In this study, a framework for monitoring EMPs and benchmarking environmental performance is developed in order to provide detailed information not only for accountants but also for engineers. It is concluded that there is no crucial link between environmental information and accounting systems and this study suggests that Organisations should enforce the interrelation between EMPs and accounting to increase business accountability. Although this study cannot serve as the definitive account of the link between environmental performance and financial performance and may not be generalizable to the hotel industry as a whole - it still represents a useful contribution to the literature because of the practical and theoretical issues it raises regarding the effective implementation of EMPs in specific Organisations, leading from the analysis of one hotel case study to the likely reverberation of such implementation upon Organisational activities.

Credit ratings aim to inform financial markets about company creditworthiness. They are used extensively by a variety of market participants to inform their portfolio selection processes as well as regulators to monitor and control the capital markets. However, the proprietary models employed by rating agencies have attracted criticism in times of economic uncertainty for their contribution to the propagation of financial crises. They have also become the focal point of academic research in respect of investigating the determinants of the rating process and the effects of ratings on market dynamics. This study examines the determinants of the decision of UK companies to obtain a credit rating by proposing a conceptual framework that draws upon the information asymmetry, signalling and default literature. In addition, it extends the extant literature on the determinants of UK firm credit ratings by investigating the individual as well as joint effect of non-financial variables on corporate ratings. It also tracks the development of credit ratings over time and identifies whether UK firm credit quality has been deteriorating and/or rating agencies have increased their rating standards. The study reveals that rated and non-rated companies have significantly different financial profiles. Furthermore, the empirical model emanating from the conceptual framework for modelling the decision to obtain a credit rating includes a combination of financial and non-financial firm attributes, namely size, financial leverage, financial flexibility, use of debt, bond issuance, default risk, institutional ownership and engagement with R&D activity. In addition, the model yields satisfactory results, classifying 9 out of 10 cases correctly. The study also reveals that the inclusion of non-financial variables adds to the explanatory power of the rating determinants models. Moreover, the results of the two stage sample selection models indicate that self-selection is not an issue among UK non-financial companies. Thus, this study concludes that better firms might share unique characteristics in contrast to their non-rated counterparts; nevertheless, these attributes do not result in poor-quality firms refraining from requesting to be rated. Finally, the results show some evidence that UK firm credit quality has deteriorated over time and that credit rating agencies have applied stricter standards in the rating process.

Traditionally, sourcing is initiated predominantly through trade shows where many suppliers make themselves available to buyers. Nowadays the Internet has changed the way business is conducted by facilitating the further evolution of new buyer and supplier relationships. Ease and convenience of information exchange, timesaving, lower costs. enhanced purchasing and marketing research have encouraged the use of the Internet as an alternative to buying, selling and sourcing through conventional channels. E-sourcing is mainly based on reverse-auction technology which automates the price negotiation in the supplier selection process. However, the function of the reverseauction is directed towards finding new suppliers with little consideration of supplier evaluation and collaboration. Thus it is mainly dedicated to indirectly-sourced materials such as office supplies and spare parts. Although the reverse auction can be used to source some direct materials, the system has neglected the sourcing process in respect of customised products where collaboration is needed. Furthermore, in the reverse-auction system, supplier evaluation is based only by the price of the product; neglecting other factors that influence buying decisions. Based on the purchasing process and on the way business is commonly conducted by large organisations. software has been developed which incorporates a user feedback facility so that confidence can be gained by the participants. Such an implementation enables the buyer to analyse supplier reliability by using its evaluation statistics. This approach changes the way that the buyer and supplier make initial contact. It replaces the traditional character assessment cues which rely on gut feeling, word of mouth. and visual perception This new computer-based approach will provide company performance information which will help the buyer to select an appropriate supplier and, may ultimately change the way in which companies source materials.

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