Search

This study investigates how exposure to a field of study influences students’ major choices. If students have incomplete information, exposure potentially helps them to learn about the scope of a field as well as how well the field matches their interest and abilities. We exploit a natural experiment where university students have to write a research paper in business, economics, or law during their first year before they choose a major. Due to oversubscription of business papers, the field of the paper is assigned quasi-randomly. We find that writing in economics raises the probability of majoring in economics by 2.7 percentage points. We show further that this effect varies across subfields: the effect is driven by assignment to topics less typical of the public's perception of the field of economics, suggesting students learn through exposure that the field is broader than they thought. [ABSTRACT FROM AUTHOR]

This paper analyzes the different law area's that affect the business world, starting with the most known, as: the international trade law and customs law, referring to the most important treaties in the field. Continue with other relevant areas such as environmental law, intellectual property, employment law and consumer law; each with its own internationally that applies in the region and several real cases where the impact these law area's may have in the business world. The text concludes with the importance and necessity of considering the impact of the law, beyond the branches more known in the world of business and trade, customs and similar right, when undertaking a lucrative activity in order to manage properly the potential impact on the businesses that are being developed. [ABSTRACT FROM AUTHOR]

The family-run business model is in the Czech Republic not used in the scope, as it is the case of other EU Member States. Until recently one of the reasons was also the absence of a legislative framework that would give to the family business or its organization a comprehensive and systematic rules and a stable order. This has - from a part - changed since January 1st, 2014 with the entry into force of the new Czech Civil Code, Act No. 89/2012 Coll. The present paper aims at pointing out the ways, forms and the diversity of family business from business in general according to the legislation in the Civil Code introducing in its Sections 700 - 707 the institute of family enterprise. In the context of economic-legal analysis undertaken some aspects related to the family enterprise are highlighted, in particular the sharing of profit gains, employment of family members in the operation of the family enterprise and the continuing of operation of the family business after the death of the family member being in the legal position of the entrepreneur. [ABSTRACT FROM AUTHOR]

In an earlier paper the authors discussed how D&O insurance can be used to reduce the governance risk facing insurers, by linking coverage to contractual obligations to follow best practice governance controls. In this paper they place governance-linked D&O insurance within the broader context of the way in which the conflicts of interest between owners and managers of firms are managed by the key intermediary institution of the board of directors. There has been increasing controversy over whether directors are playing the role they are meant to in governance or whether they have become excessively beholden to chief executive officers. Regulation and the use of the legal system have been the predominant means of disciplining directors, but each has its drawbacks, particularly in terms of the disincentives they create for qualified individuals to serve as directors in the first place. What is missing is any role for market forces in governance, with their promise to achieve better cost effectiveness and innovation in governance practice. The authors argue that governance-linked D&O insurance is a means toward that end of market-based governance, with process-based coverage bringing together the tools for better governance risk management with the motivation for directors to exercise their fiduciary responsibilities. [ABSTRACT FROM AUTHOR]

This paper discusses recent developments in securities litigation. First, the paper addresses class action filing trends. Class action filings decreased in 2005, both compared to 2004 and the 1996–2004 average. The article discusses possible reasons for this trend, including the impact of the United States Supreme Court’s decision in Broudo v Dura Pharmaceuticals, Inc. Secondly, the article discusses Regulation FD and Securities and Exchange Commission v. Siebel Systems, Inc., et al., the first civil action brought by the SEC pursuant to Regulation FD. Thirdly, the article discusses recent developments under the Private Securities Litigation Reform Act, including the Seventh Circuit’s first decision regarding the Reform Act’s scienter standard, the impact of 10b5-1 trading plans, a restrictive ruling by the First Circuit on the Reform Act’s safe harbour for forward-looking statements, and application of Dura by lower courts. Finally, the paper discusses the Delaware Chancery Court’s decision following the trial in the Disney case. [ABSTRACT FROM AUTHOR]

Corporations lobbied for the passage of the Private Securities Litigation Reform Act of 1995 (PSLRA) to limit private enforcement of the US securities laws. While the PSLRA has achieved this goal to a certain extent, it has also impacted securities litigation, and related Employee Retirement Income Security Act (ERISA) and derivative litigation, in ways that its proponents never intended. This paper discusses the impact of institutional investor participation in securities litigation, which increased significantly as a result of lead plaintiff provisions in the PSLRA that evince an intent to have institutional investors play a larger role in securities cases. Specifically, the paper focuses on the ability of institutional investors to obtain corporate governance reforms and the contribution of personal funds by outside directors, as components of securities litigation settlements. The paper also provides an overview of ERISA actions that are often litigated in parallel with securities fraud actions. While these actions concern different legal theories, pleading standards and damages formulations to those of securities actions, there is an interplay between the two types of actions in at least two major areas — settlement and discovery. Indeed, the presence of parallel ERISA litigation in several high-profile securities actions has enabled the securities plaintiffs to obtain relief from the PSLRA’s discovery stay allowing them to have early access to any materials that have been produced to the ERISA plaintiffs. [ABSTRACT FROM AUTHOR]

This paper discusses the ways and means employed by Director and Officer Liability Insurance underwriters in the assessment of the financial statements of public companies. The techniques described are offered for the instruction and edification of corporate directors, particularly audit committee members. Additionally, the paper offers a proposal for the ongoing dialogue of underwriters, risk managers and corporate directors for the end purpose of developing improved corporate risk management practices and procedures. [ABSTRACT FROM AUTHOR]

The settlements in WorldCom and Enron, together with enforcement actions by the SEC and the new remedies under Sarbanes–Oxley, indicate that independent directors will face very real financial, regulatory and criminal liability if they fail to execute their duties properly. This paper, written by two attorneys with the SEC, reviews some of the recent cases concerning independent directors. In recent years, the SEC and the private plaintiffs’ bar have indicated a willingness to hold independent directors accountable for essentially negligent or reckless supervising by pursuing enforcement actions. In addition, the SEC has brought cases against other public companies to enforce the public’s right to know any facts that might compromise the director’s independence, particularly when directors receive undisclosed compensation at the direction of management. The paper concludes by noting that early indications suggest that independent directors are taking action and exercising their powers in the face of government investigations of the public companies they serve. [ABSTRACT FROM AUTHOR]

This paper, the second in a two-part series, surveys recent changes in enforcement efforts by the Securities and Exchange Commission (SEC) in the wake of the Sarbanes–Oxley Act of 2002. In particular, it examines new or recently fortified weapons in the SEC’s arsenal, including officer and director bars, SOX certification and other disclosure requirements, penny stock bars, expanded equitable remedies, and a new focus on attorneys. This paper also discusses recent enforcement efforts by the Public Company Accounting Oversight Board (PCAOB) — a centerpiece of the Sarbanes–Oxley enforcement landscape — against accounting firms and individual accountants. [ABSTRACT FROM AUTHOR]

This paper surveys the recent changes in Securities and Exchange Commission (SEC) enforcement measures following the enactment of the landmark Sarbanes–Oxley Act of 2002 (SOX). The paper, the first in a two-part series, focuses on the Commission’s use of the new or expanded powers provided by SOX in cases involving financial fraud and mismanagement by large public companies. In particular, the paper illustrates recent uses of large civil penalties, payments under the Fair Funds provision, expanded equitable remedies, and the plaement of so-called extraordinary payments to executives in escrow. [ABSTRACT FROM AUTHOR]

The public-health community views mandatory Front-of-Pack (FOP) nutrition labels and nutritional taxes as promising tools to control the growth of food-related chronic diseases. This paper uses household scanner data to propose an ex-ante evaluation and comparison of these two policy options for the fromage blanc and dessert yogurt market. In most markets, labelling is voluntary and firms display fat labels only on the FOP of low-fat products to target consumers who do not want to eat fat. We here separately identify consumer preferences for fat and for FOP fat labels by exploiting an exogenous difference in legal labelling requirements between these two product categories. Estimates of demand curves are combined with a supply model of oligopolistic price competition to simulate policies. We find that a feasible ad valorem fat tax dominates a mandatory FOP-label policy from an economic perspective, but both are equally effective in reducing average fat purchases. [ABSTRACT FROM AUTHOR]

This section presents abstracts of papers on city planning published from 2007 to 2008, including "Streets, Sounds and Identity in Inter-war Harlem," by Clare Corbould, "(Re)making the Other, Heterosexualising Everyday Space," by Kath Browne, and "Rankings and Reactivity: How Public Measures Recreate Social Worlds," by Wendy Nelson Espeland and Michael Sauder.

The recent years have seen many reforms in corporate governance and disclosure in the USA as well as in Europe — so also in Finland. Although the reforms in Europe mostly are based on voluntary corporate governance codes rather than laws such as the Sarbanes–Oxley Act 2002, these developments have in many cases quite radically reshaped elements of corporate governance, such as board work, in Finland. This paper sets out to give an overview of the governance framework in Finland, its recent developments, and reports on some empirical findings concerning governance and compliance. [ABSTRACT FROM AUTHOR]

This paper discusses a number of problematic areas in D&O insurance which threaten the breadth and scope of securities coverage policyholders expect when purchasing D&O insurance coverage. Arguments made by a number of D&O insurance underwriters related to financial restatements and rescission, securities claims alleging fraud, and coverage for Section 11 and 12 securities claims are discussed and analysed. [ABSTRACT FROM AUTHOR]

This paper provides an argument that corporate managers co-opt the allegiance of their board members. Though owners elect board members, if the board is controlled by management the nominating process tends to guarantee a continuation of that control. Though board members operating with a managerial bias might violate a duty to shareholders, directors and officers (D&O) insurance assists managers in co-opting board support by eliminating the financial consequences of violating that duty. Corporate social responsibility and stakeholder movements, by increasing the number of stakeholders whose interests are likely to be violated by a continued managerial bias, are likely to increase the price of D&O coverage. This price effect and other recently proposed governance-linked coverage changes alter, but do not eliminate, the benefit of a continuing managerial bias. [ABSTRACT FROM AUTHOR]

This paper examines the rise of foreign ownership in France. The author uses Germany as a controlling, comparative case study. It is argued that firm-level institutional arrangements of workplace organisation constitute the most significant variable in accounting for the greater attractiveness of French firms over their German counterparts to short-term, impatient capital — namely, hedge and mutual funds. The author demonstrates how institutional changes in both French and German corporate governance has not affected the process by which firms build their innovative capabilities, thereby highlighting the compatibility between institutional change in national business systems and the absence of convergence between them. [ABSTRACT FROM AUTHOR]

Since the Cadbury Report of 1992 several Member States of the European Union have provided national codes on corporate governance or best practice, and the European Commission in its Company Law Action Plan has declared its intention to see these coordinated and converge. The five Nordic countries that are all members of either the EU or EEA have passed such codes relatively late. Based on these Nordic Codes, this paper takes a critical look at what this venture into European soft law or best practices is about, and points out the differences in the Nordic approach to this kind of company law regulation that are visible in the Codes and may be at odds with the intended convergence. [ABSTRACT FROM AUTHOR]

This paper proposes that, given the broad scope of the term ‘wrongful act’, and the fact that personal conduct exclusions typically require an adjudication of the underlying facts before they can be invoked, D&O insurance policies should pay defence costs in most corporate mismanagement cases. [ABSTRACT FROM AUTHOR]

In the authors’ last paper,1 the audit committee membership requirements imposed by the Sarbanes–Oxley Act of 2002, the Securities and Exchange Commission and the US securities markets were discussed. In particular, the authors discussed these rules and their interaction with one another, focusing primarily on the rules requiring each audit committee member to be independent of management and financially literate, and at least one member of the audit committee to qualify as a financial expert. This paper highlights the added complexities audit committee members face as a result of the interplay between the audit committee membership requirements and general corporate law. In this regard, the authors take particular note of recent Delaware case law that potentially bears on the audit committee membership requirements of independence and financial expertise, including case law in which apparently independent directors were disqualified from serving on an independence committee based on alleged conflicts of interest and case law in which the court focused on a director’s financial expertise in concluding that the director should be personally liable for approving a particular transaction. While it is important to understand the implications of these cases, directors, including audit committee members, need not overreact. The Delaware Supreme Court, perhaps the most influential court in the US with respect to business cases, has provided welcome guidance and has done so by reaffirming the primacy and vitality of the business judgment rule and in specifically addressing the persuasiveness of arguments that social connections and personal friendships can result in disqualification. [ABSTRACT FROM AUTHOR]

In response to today’s wave of corporate investigations and prosecutions, prosecutors have sought to require significant changes in corporate culture, compliance and controls and, as importantly, to monitor those changes for a reasonable time. The result is the corporate deferred prosecution agreement and its adjunct, the Independent Monitor. This paper first will review the development of deferred prosecution agreements and the factors which may determine which companies receive such treatment; secondly, it will analyse the Independent Monitor’s role, both the common terms of reference and certain unique terms relevant to specific cases; and thirdly, it will suggest the outlines of an Independent Monitor’s workplan. [ABSTRACT FROM AUTHOR]

The purpose of this paper is to explore a more constructive role for corporate boards — one that would entail directors recognising the operational primacy of management and focusing their attention on the manner in which a corporation can best fulfil its long-term strategy. Paying more attention to nurturing long-term, sustainable value will help differentiate roles and will suggest the need for new metrics and a deeper appreciation by directors of corporate strategy and organisational capacity. At a time when senior management are dedicating disproportionate resources to immediate compliance issues, it is critical that boards take such a broad view. [ABSTRACT FROM AUTHOR]

Close links between banks and large companies have been seen as a key component of Germany’s corporate governance system. The recent sale of large shareholdings by banks raises the question of to what extent this system will converge to the US model of dispersed ownership. This paper argues that concentrated ownership will remain a key feature of this system. In addition, board-level representation of employees and the lack of a culture of independent directors are further factors supporting incremental change in Germany’s corporate governance system rather than wholesale convergance to the US model. [ABSTRACT FROM AUTHOR]

Since its reopening in the early 1990s, the stock market has gained considerable momentum in China. In less than 15 years, the Chinese stock exchange has grown into the eighth largest in the world, with market capitalisation of over US$500bn. This expansion, however, has been accompanied by frequent discoveries of accounting malpractice at Chinese listed firms. This paper begins by tracing the origins of these accounting failures through analysis of the Chinese stock market’s institutional context, and goes on to classify 11 cases of accounting failures into various categories. [ABSTRACT FROM AUTHOR]

During the Ottoman period there was established an organization named :hisbe' or 'ihtisah', the office of superintendent of markets. It dated back to the early years of Islam, in order to regulate social and economic behaviour throughout bazaars and marketplaces and to maintain them in accordance with social norms. This organization had some powers and responsibilities of today's ministries of finance, trade, economy, industry, justice and of the organization of religious affairs as well as those of municipalities. The officials named 'muhtesib' of this organization checked goods and services exchanged in the market and whether they met the standards in price and quality that were fixed by the government and applied some corrabarative rules for that. In this study, after giving brief information about this organization and the duties of its officials, the 20th section which deals with 'ihtisab' of the Ottoman Code of Laws for Suleiman the Magnificent has been briefly analysed. The study has pointed out that Ottomans attached much importance to social order, economic stability, business and trade ethics, quality of goods and services, conditions of health, cleanliness of environment, animal rights as well as those of slaves, workers and tenants. All goods and services produced and exchanged at that time, standards and selling prices of them, even standards, measures and qualities of inputs used in the production of these goods and services were listed one by one and in detail in those regulations. The paper presents a historical record of these regulations. [ABSTRACT FROM AUTHOR]

Recent trade negotiations, both at the regional and multilateral level, have seen a resurgence of the issue of trade and labour standards. Labour interests in high-standards countries argue that low labour standards are an unfair source of comparative advantage, and that increasing imports from low-standards countries will have an adverse impact on wages and working conditions in high-standards countries, thus leading to a race to the bottom of standards. For low-standards countries, there is the fear that this is just a form of disguised protectionism and that the imposition of high labour standards upon them is equally unfair since it will erode their competitiveness, the latter being largely based on labour costs. Our objective in the present paper is to cast some light on the above debate from both a theoretical and empirical perspective. In particular, we first discuss some possible theoretical links between labour standards and comparative advantage through their effects on the terms of trade. We then investigate empirically the relationship between labour standards, comparative advantage and export performance. Overall, our empirical results suggest that caution should be exercised before drawing broad conclusions on the magnitude and direction of these effects. [ABSTRACT FROM AUTHOR]