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Background: As of June 18, 2020, Uganda had registered 741 COVID-19 cases, and several intervention measures have been implemented to control the spread of the SARS-CoV2. With increasing risk of community transmission, it is important to forecast the extent on the COVID-19 epidemic in Uganda. This study aimed to design a predictive model to provide reliable estimates for COVID-19 in Uganda. Methods: A stochastic model of a modified SEAIR (Susceptible, Exposed, Infected Asymptomatic, Infected Symptomatic and Removed) type, which made assumptions on the local SARS-CoV2 transmission, was used to forecast the impact of COVID-19 in relation to the varying levels of compliance to mitigation measures. Results: Our results predict between 2,000 to 4,000 cases within 100 days from lifting the lockdown if no or weak interventions are in place. However, if social distancing was implemented at 40% effectiveness, to prevent interaction between susceptible and infected populations with no use of face-masks, we would expect 200 to 400 cases. The number of infections decreases with increase in the level of effectiveness of social distancing measures and the curve flattens at ≥60% level of social distancing. Wearing face-masks at ≥40% consistency and social distancing at 50% reduces the number of infections and flattens the curve. Interpretation: The prompt public health response in Uganda has so far limited COVID-19 to imported cases, comprising mainly of truck drivers. Although lifting the lockdown measures is feasible, social distancing strategies, as the most effective measure, should be maintained at high levels and supplemented with wearing face-masks. Funding Statement: None to declare Declaration of Interests: All authors have no reported conflicts of interest. Ethics Approval Statement: Not required

Current therapies for improving memory in Alzheimer’s disease are focused on correcting for defective cholinergic transmission by increasing acetylcholine levels through inhibition of acetylcholinesterase enzymes. These treatments are however associated with limited clinical efficacy and dose-limiting adverse effects. Here we describe agonist-bound crystal structures of the M1 muscarinic acetylcholine receptor (M1 mAChR) and its application in supporting the rational drug design of a selective M1-orthosteric agonist, HTL0009936. On the basis of pro-cognitive effects across a range of pre-clinical animal models and a favourable safety and toxicology profile HTL0009936 was progressed to first in human trials where the agonist activated central processes corresponding to learning and memory circuitry. Hence, our study not only describes the pharmacological profile of a M1 mAChR agonist with the potential to improve memory in Alzheimer’s disease but also demonstrates how to rationally progress the development of a G protein-coupled receptor ligand from structure to clinical candidate.

Prior research shows that the outcome effect in auditor performance evaluations can create a disincentive to exercise professional skepticism by punishing auditors whose skeptical behavior does not identify a misstatement. We experimentally demonstrate that perspective taking improves this evaluation process by mitigating the influence of the outcome effect and increasing evaluator focus on decision process quality. In a common audit setting in which a staff auditor exhibits appropriate yet costly skeptical behavior that correctly identifies no misstatement, supervising auditors prompted to take the perspective of the staff auditor evaluate the staff’s performance more highly than unprompted auditors—performance ratings that align with the ratings provided to auditors who detect a misstatement. We provide confirming evidence that perspective taking successfully removes the outcome penalty for no-misstatement skeptical behavior by increasing supervisor attention toward information cues about the staff’s decision process quality and away from those about the non-diagnostic misstatement outcome. We also show that perspective taking increases evaluator consensus and reduces the “idiosyncratic rater effects” that often plague performance reviews. Overall, we demonstrate that perspective taking can improve attention to process quality and that audit firms can use perspective taking to help properly align reward structures with desired auditor behavior.

We provide a comprehensive review and synthesis of behavioral experimental literature that examines persuasion in auditing. We organize our review by applying McGuire’s (1969, 1978) five Components of Persuasive Communication: source, message, receiver, channel, and destination from his Communication-Persuasion Matrix. Our synthesis identifies two primary contexts in which persuasion attempts occur in the auditing setting: (1) auditors and clients engaging in or coping with others’ persuasive communications; (2) auditors coping with subordinates’ persuasion attempts in working papers. From our analysis, we identify a concentration of prior persuasion research on source, message, and receiver variables, and we develop 26 questions for future research to consider based on gaps we identify in the literature. Our literature review specifies and organizes key features of persuasion in auditing, enhances our understanding of how auditors and clients initiate and respond to persuasive communications, and discusses significant implications for both audit quality and financial reporting outcomes.

This paper examines how employee earnings at small firms respond to a cash flow shock in the form of a government R&D grant. We use ranking data on applicant firms, which we link to IRS W2 earnings and other U.S. Census Bureau datasets. In a regression discontinuity design, we find that the grant increases average earnings with a rent-sharing elasticity of 0.07 (0.21) at the employee (firm) level. The beneficiaries are incumbent employees who were present at the firm before the award. Among incumbent employees, the effect increases with worker tenure. The grant also leads to higher employment and revenue, but productivity growth cannot fully explain the immediate effect on earnings. Instead, the data and a grantee survey are consistent with a backloaded wage contract channel, in which employees of financially constrained firms initially accept relatively low wages and are paid more when cash is available. Institutional subscribers to the NBER working paper series, and residents of developing countries may download this paper without additional charge at www.nber.org.

Analyzing data on all U.S. employers in a cohort of entering firms, we document a highly skewed size distribution, such that the largest 5% account for over half of cohort employment at firm birth and more than two-thirds at firm age 7. Little of the size variation is accounted for by industry or amount of finance, but relative size is strongly persistent over time: at age 7, the probability of 20+ employees is about 40 times larger for those entering with 20+ than for those entering with one. We link administrative and survey data to study the role of founder characteristics in high growth, defined as the largest 5% of the cohort at ages 0 and 7.Female-founded firms are 50% less likely to be in this ventile at both ages, and 34% less likely when controlling for detailed demographic and human capital variables. A similar initial gap for African-Americans, however, disappears by age 7. Founder age is positively associated with high growth at entry, but the profile flattens and turns negative as the firm ages. The education profile is initially concave, with graduate degree recipients no more likely than high school graduates to found high growth firms, but the former nearly catch up to those with bachelor's degrees by firm age 7, while the latter do not. Most other relationships of high growth with founder characteristics are highly persistent over time. Prior business ownership is strongly positively associated, and veteran experience negatively associated, with high growth. A larger founding team raises the probability of high growth, while, controlling for team size, diversity (by gender, age, race/ethnicity, or nativity) either lowers the probability or has little effect. Controlling for start-up capital raises the high-growth probability of firms founded by women, minorities, immigrants, veterans, smaller founding teams, and novice, younger, and less educated entrepreneurs. Perhaps surprisingly, female, minority, and less-educated entrepreneurs tend to choose high-growth industries, but fewer of them achieve high growth relative to their industry peers.

This Amicus Brief was filed with the U.S. Supreme Court on behalf of nearly 50 law and business faculty in the United States and Canada who have a common interest in ensuring a proper interpretation of the statutory securities regulation framework put in place by the U.S. Congress. Specifically, all amici agree that Item 303 of the Securities and Exchange Commission's Regulation S-K creates a duty to disclose for purposes of Rule 10b-5(b) under the Securities Exchange Act of 1934. The Court’s affirmation of a duty to disclose would have little effect on existing practice. Under the current state of the law, investors can and do bring fraud claims for nondisclosure of required information by public companies. Thus, affirming the existence of a duty to disclose will not significantly alter existing practices or create a new avenue for litigants that will lead to “massive liability” or widespread enforcement of “technical reporting violations.” At the same time, the failure to find a duty to disclose in these circumstances will hinder enforcement of the system of mandatory reporting applicable to public companies and weaken compliance. Reversal of the lower court would reduce incentives to comply with the requirements mandated by the system of periodic reporting. Enforcement under Section 10(b) of and Rule 10b-5(b) under the Securities Exchange Act of 1934 by investors in the case of nondisclosure will effectively be eliminated. Reversal would likewise reduce the tools available to the Securities and Exchange Commission to ensure compliance with the system of periodic reporting. In an environment of diminished enforcement, reporting companies could perceive their disclosure obligations less as a mandate than as a series of options. Required disclosure would more often become a matter of strategy, with issuers weighing the obligation to disclose against the likelihood of detection and the reduced risk of enforcement. Under this approach, investors would not make investment decisions on the basis of “true and accurate corporate reporting. . . .” They would operate under the “predictable inference” that reports included the disclosure mandated by the rules and regulations of the Securities and Exchange Commission. Particularly where officers certified the accuracy and completeness of the information provided in the reports, investors would have an explicit basis for the assumption. They would therefore believe that omitted transactions, uncertainties, and trends otherwise required to be disclosed had not occurred or did not exist. Trust in the integrity of the public disclosure system would decline. The lower court correctly recognized that the mandatory disclosure requirements contained in Item 303 gave rise to a duty to disclose and that the omission of material trends and uncertainties could mislead investors. The decision below should be affirmed.

SUMMARY We examine the effects of two critical factors auditors consider when auditing complex estimates, the decision to use a specialist and the relative aggressiveness of management's estimate, on jurors' auditor negligence assessments. Experiment 1 finds jurors view auditors' acceptance of a more aggressive estimate as more justifiable, and are thus less likely to find them negligent, when auditors consult with either internal or external specialists. However, these litigation benefits do not extend to audits of less aggressive estimates. Experiment 2 finds jurors are less likely to find auditors negligent when auditors use an external versus an internal specialist, due to greater perceptions of external specialist independence. We also find auditors accrue similar litigation benefits when an external specialist reviews the internal specialists' work. We conclude that utilizing external specialists, either to directly test complex estimates or to review internal specialists' work, limits auditors' litigation exposure when auditing relatively aggressive estimates. JEL Classifications: M40; M41; M42. Data Availability: Available upon request from the authors.

In the corporate governance area, few regulations have greater importance than Rule 14a-8. Put in place in 1942, the provision requires companies to include in their proxy statements proposals properly submitted by shareholders. Phrased in precatory language, proposals typically advise rather than command. Rule 14a-8, therefore, provides a cost effective mechanism for obtaining the collective views of shareholders on the designated matters. The rule did not always play such a central role in the governance process. For the first four decades following adoption, proposals did not receive significant support. Through 1981, only two were approved by a majority of the votes cast. Unsurprisingly, therefore, management often viewed the provision as a soapbox used by “special interest” investors to air issues of little importance to most shareholders. As institutional investors became more active and various regulatory restrictions were lifted, however, Rule 14a-8 assumed a more central role in the governance debate. The rule emerged as an important component of the engagement process between owners and managers. Proposals uniquely provide companies with insight into the collective views of shareholders. Moreover, support for proposals can be assessed over time, allowing managers to better understand the evolution in shareholder attitudes. Proposals also result in increased communications between long-term shareholders and directors, an important development in an era of activist investors. Despite the role of the rule in the engagement process, calls have arisen for additional restrictions that would effectively eliminate use for most shareholders. Characterizing the provision as “dominated by a limited number of individuals” who have pursued “special interests” that “have no rational relationship to the creation of shareholder value”, critics have argued for, among other things, a dramatic increase in the ownership thresholds and holding periods. Similarly, asserting that proposals contain “general social issues” that “rarely garner meaningful shareholder support”, they have sought changes designed to limit these types of submissions. These descriptions do not accurately characterize the state of the shareholder proposal process. Moreover, the calls for additional restrictions cannot be explained as a consequence of an increase in the use of the rule. The number of proposals submitted in recent years are commensurate with earlier periods. Nor is the opposition explainable by the costs associated with proposals. The actual cost of distribution has likely gone down, particularly with the advent of electronic distribution of proxy statements and other technology enabled changes. The expenses associated with the no action process are readily controllable and, in any event, the number of requests have declined from earlier periods. What has changed, however, has been an increase in shareholder support for proposals. While proposals are advisory, they can and do affect the decision making process inside the boardroom. Those favoring significant restrictions on the use of the rule would, presumably, prefer to avoid this type of influence by denying shareholders the right to collectively speak on relevant issues. In addition to conflicting with a board’s fiduciary obligations, the approach will also generate significant unintended consequences. Denying access to Rule 14a-8 will not lessen interest in the relevant issues. It will, however, interfere with the engagement process between owners and managers and force shareholders to pursue other avenues of influence, whether litigation, public campaigns, or broad based regulatory reform. Rule 14a-8 could use some updating, as the student articles published in this edition of the law review forcefully demonstrate. Most of the needed revisions can be implemented through interpretive changes issued by the staff of the Division of Corporation Finance. The interpretations would allow the rule to function more effectively and better reflect the provision’s current position in the corporate governance debate. Current proposals designed to significantly reduce the number of proposals, however, would have the opposite effect. This paper is an introduction to an issue of the online edition of the University of Denver Sturm College. The issue includes articles written by students on all important aspects of Rule 14a-8. This issue is the second of three and includes seven student articles. The articles in this issue address the exclusions for personal grievances (Rule 14a-8(i)(4)) and for the absence of power/authority (Rule 14a-8(i)(6)). In addition, the issue includes articles on disclosure of the identity of the proponent (Rule 14a-8(l)), the evidence needed to establish shareholder eligibility (Rule 14a-8(b)), the number of proposals that can be submitted to a single company (Rule 14a-8(c)), and the time period for submitting proposals to the company (Rule 14a-8(e). For the first issue, see “The Shareholder Proposals Rule and the SEC”. A third issue is anticipated in 2018.

At the 15th year anniversary of Sarbanes Oxley, the label of “quack” corporate governance proved incorrect. SOX succeeded in putting in place mechanisms that promoted investor confidence by raising the quality of financial disclosure. The legislation did so in a number of innovative ways. A regulator was created to oversee public company accounting firms but, rather than add another government agency, Congress assigned the task to the Public Company Accounting Oversight Board, a non-profit corporation overseen by the Securities and Exchange Commission. Congress strengthened the role of the gatekeeping function of the board of directors, primarily through listing standards applicable to audit committees. Boards were encouraged to add financial expertise through a system of “comply or explain,” something widely used in Europe but, until SOX, not in the US. Information flow to the board was increased and companies had to put in place mechanisms designed to allow employees to make confidential complaints to the audit committee about concerns over financial disclosure. Audits quality was improved and officers were made more responsible for financial disclosure through certification. Concern with the public securities markets has again arisen, with blame placed on SOX and other forms of regulation. Some have pointed to a reduction in the number of IPOs and the presence of a large number of unicorns (companies with a value of more than $1 billion) that have chosen to remain in the private equity markets. Calls have arisen to further restrict the requirement that outside auditors “attest” to a public company’s internal controls and to restrict the use of Rule 14a-8 by shareholders. Both proposals, however, are misplaced. Unicorns have a number of reasons for delaying IPOs. The strength of the private markets provides a degree of flexibility over the timing of public offerings that did not exist in earlier eras. Moreover, with the prevalence of dual class stock structures, founders, rather than private equity funds, likely have greater say over the timing of a public offering. The public markets can always be improved. The strength of the markets is transparency and transparency arises through disclosure. Investors could benefit from an improved system of disclosure. Reform should address both the method of filing and accessing information as well as the contents of disclosure. Much of the system of disclosure has been in place since the 1980s, before anyone had heard of the Internet, much less social media or artificial intelligence. In doing so, however, the focus should not be on disclosure "overload" but on disclosure "effectiveness."

Analysis, Micro Offering Safe Harbor Act, Private Placement Improvement Act of 2016, Fix Crowdfunding Act and Supporting America’s Innovators Act of 2016, “The JOBS Act at Four: Examining Its Impact and Proposals to Further Enhance Capital Formation”, Capital Markets and Government Sponsored Enterprises, Financial Services Committee, House of Representatives, April 14, 2016.

The Securities and Exchange Commission has proposed revisions to the disclosure process. See Concept Release, Exchange Act Release No. 77599 (April 13, 2016). Among other things, the Commission requested comments on the disclosure of environmental, social and governance (ESG) matters. The attached letter analyzes the comment letters, concluding that the letters for the most part reflect a consensus on three basic points: (1) The existing reporting regime with respect to ESG disclosure does not adequately meet the needs of shareholders and other investors. While some commenters believe that the problem can be solved through increased guidance and enforcement by the Commission, most do not. Instead, changes to the disclosure regime are needed; (2) In addition to ensuring the disclosure of material information (however defined), SEC requirements should be designed to promote uniformity, reliability and comparability of ESG disclosure; and (3) agreement exists on the need for a more robust regime for the disclosure relating to a company’s sustainability, with such analysis taking into account sustainability over a longer term horizon than is typically the case, address ESG issues where relevant, and include a qualitative analysis of efforts to reduce or remediate threats to sustainability. The letter analyzes the definition of materiality, concluding that the term is not limited to matters that will have a significant effect on earnings or operations in the short term. The letter further notes that the disclosure system is also built around the need for comparability, an approach that is not dependent upon the need to show the materiality of the information. To address the areas of consensus by commenters supporting increased ESG disclosure, the Commission should provide additional guidance on the applicability of existing disclosure obligations to ESG matters, adopt a prescriptive regime that requires disclosure of specific ESG matters that are important to broad segments of the investor community and common to all or most public companies, and add an additional Item to Regulation S-K that specifically addresses sustainability primarily through a principles based disclosure regime.

This letter comments on the SEC’s proposals to improve disclosure effectiveness by altering the requirements of Regulation S-X. In particular, the letter asserts that the practice of requiring the use of pro forma financial statements under Rule 3-05 should be altered in a manner that makes the financials more effective. This could be done by allowing management to make greater use of assumptions and estimates in developing the pro forma financial statements, thereby providing shareholders with an analysis of the acquisition as seen “through the eyes of management.”

Recent research maintains that the observed variation in productivity within industries reflects resource misallocation and concludes that large GDP gains may be obtained from market-liberalizing polices. Our theoretical analysis examines the impact on productivity dispersion of reallocation frictions in the form of costs of entry, operation, and restructuring, and shows that reforms reducing these frictions may raise dispersion of productivity across firms. The model does not imply a negative relationship between aggregate productivity and productivity dispersion. Our empirical analysis focuses on episodes of liberalizing policy reforms in the U.S. and six East European transition economies. Deregulation of U.S. telecommunications equipment manufacturing is associated with increased, not reduced, productivity dispersion, and every transition economy in our sample shows a sharp rise in dispersion after liberalization. Productivity dispersion under central planning is similar to that in the U.S., and it rises faster in countries adopting faster paces of liberalization. Lagged productivity dispersion predicts higher future productivity growth. The analysis suggests there is no simple relationship between the policy environment and productivity dispersion.

We analyze linked databases on all SBA loans and lenders and on all U.S. employers to estimate the effects of financial access on employment growth. Estimation exploits the long panels and variation in local availability of SBA-intensive lenders. The results imply an increase of 3 to 3.5 jobs for each million dollars of loans, suggesting real effects of credit constraints. Estimated impacts are stronger for younger and larger firms and when local credit conditions are weak, but we find no clear evidence of cyclical variation. We estimate taxpayer costs per job created in the range of $21,000 to $25,000. This article is protected by copyright. All rights reserved

In ATP, the Delaware Supreme Court upheld as facially valid a bylaw that required owners in a non-stock corporation to pay all legal fees in any action against the entity, its members or owners, unless owners obtained substantially all the relief sought in the complaint. While the Supreme Court has not yet expressly applied the analysis to public companies, the expansive breadth of its reasoning provided boards of “for profit” businesses with an immediate weapon that could be, and has been, used to prevent shareholders and investors from filing actions seeking to expose malfeasance by corporations and their directors. Unsurprisingly, these provisions have proved popular. The response by some has been to ignore the obvious conflict of interest that comes with allowing directors to adopt bylaws that insulate their own behavior from legal challenge and instead characterize any concern as an overstatement. In fact, the ATP decision represents a radical and unjustifiable shift in the nature of corporate law. The Court effectively dismantled a carefully crafted framework put in place by the Delaware legislature. The effect of the decision was to eliminate all meaningful limits in the DGCL on the purpose and content of bylaws adopted by directors and to give boards an effective veto over the filing of actions challenging their behavior. The decision imposed unacceptable financial risk on shareholders (and “prior” shareholders), put in place a frame-work for the creation of other types of bylaws antagonistic to the interests of shareholders, and provided the federal government with an incentive to intervene in the corporate governance process, further eroding Delaware’s historic leadership in the field.

We analyze linked databases on all SBA loans and lenders and on all U.S. employers to estimate the effects of financial access on employment growth. Estimation exploits the long panels and variation in ease of access to SBA lenders. The results imply an increase of 3 to 3.5 jobs for each million dollars of loans, suggesting real effects of credit constraints. Estimated impacts are stronger for younger and larger firms and when local credit conditions are weak, but we find no clear evidence of cyclical variation. We estimate taxpayer costs per job created in the range of $21,000 to $25,000.

Analyzing a list of all Small Business Administration (SBA) loans in 1991 to 2009 linked with annual information on all U.S. employers from 1976 to 2012, we apply detailed matching and regression methods to estimate the variation in SBA loan effects on job creation and firm survival across firm age and size groups. The estimated number of jobs created per million dollars of loans within the small business sector generally increases with size and decreases in age. The results suggest that the growth of small, mature firms is least financially constrained, and that faster growing firms experience the greatest financial constraints to growth. The estimated association between survival and loan amount is larger for younger and smaller firms facing the “valley of death.”

This amicus brief filed by Scholars of the Constitutional Rights of Children turns the spotlight on children in same-sex families. The brief enumerates the ways Section 3 of DOMA impairs children's interests by denying federal recognition of their parents' marriages.

This paper estimates the relative multi-factor productivity (MFP) of privatized and state-owned enterprises using a long panel on all initially state-owned manufacturing firms in Ukraine. The large size and length of the time series in the data permit us to track the privatization process and to estimate the impact of privatization within industry-year cells and with controls for firm fixed effects and trends. Results with these methods imply an average 5-10% relative MFP for majority privatized versus state-owned firms. The gap increases with time since privatization, reaching about 15-17% five years after privatization. It also increases with calendar time although recent privatizations are associated with smaller relative MFP. We find no evidence of "sequencing" of privatization based on 1992 relative MFP, but the data suggest a higher survival rate for privatized versus state firms and one that is more closely linked to 1992 MFP.The results also imply that MFP gains from privatization are decreasing in pre-privatization MFP. The relatively few cases in which foreign investors take control result in much higher relative MFP, 22-40% on average, compared to domestic private ownership, but the gap is much lower when the foreign source country is "offshore" – an indirect channel for Ukrainian nationals – and it is also lower when the source is Russia. Privatization of 100% ownership has much larger effects than partial privatization of either minority or majority stakes, ownership structures that have largely disappeared since the early 2000s, as Ukraine has sold off remaining shares. Nevertheless, our database contains more than 1000 majority state-owned manufacturing firms as of 2013 that could be considered for privatization in the future.

Congress assigned the Securities and Exchange Commission (SEC or Commission) responsibility over the proxy process in the Securities Exchange Act of 1934. The Act gave little guidance but left the Commission with broad authority to adopt rules that were “necessary or appropriate in the public interest or for the protection of investors.” The Commission found itself thrown into the middle of a complex regulatory environment already inhabited by other decision makers. State law governed the substantive rights of shareholders, determining who could vote, the matters subject to their approval, and the percentages needed for adoption. Stock exchanges regulated the relationship between brokers and street name owners and the activities of listed companies. The SEC for the most part focused on disclosure. Solicitations were to be accompanied or preceded by a proxy statement that provided shareholders with the information needed to make an informed voting decision. To ensure accuracy, the earliest version of the rules included a strong anti-fraud provision. Beginning in a modest fashion, the proxy process ultimately assumed a disproportionate role in the system of corporate governance. The right of shareholders to nominate directors or make proposals was meaningless without the ability to solicit proxies. Aware of this, the proxy rules were designed to function as a “replacement” for the annual meeting and to give shareholders the same rights available under state law. In fact, the rules amounted to more of a limit on, rather than a replacement of, the rights of shareholders. The costs associated with solicitations restricted shareholders communications and sharply curtailed the ability to nominate directors. Even where the Commission provided access to the proxy statement, the authority extended only to certain shareholders and allowed for the exclusion of proposals on grounds not sanctioned under state law. Proxy cards bore little resemblance to ballots used at the meetings, restricting shareholder choice in contests for control of the board. Changes in the underlying dynamics, however, gradually challenged the system of regulation. Investors shifted from record to nominee ownership, facilitating trading activity but complicating the voting process. Institutional investors grew in importance and chaffed under the restrictions contained in the rules. The proxy process increasingly confronted the logistical problems that arose from the need to process billions of votes in thousands of meetings over a short period of time. The proxy rules needed reform. Longstanding but antiquated provisions interfered with effective exercise of voting rights. The plethora of participants made accountability difficult. Hanging chads threatened to throw results into doubt. The process resulted in low participation rates for retail investors. Aware of these strains, the Commission initiated a comprehensive reexamination of the regulatory regime in 2010. Dubbed the Proxy Plumbing Release, or Concept Release, the SEC sought comments on a wide range of issues that potentially affected the integrity of the voting process. The Concept Release addressed, among other things, back office issues, the role of intermediaries, and the plight of retail investors. This short introduction reviews some of the progress to date on this initiative.

This paper sheds new light on the effects of the minimum wage on employment from a two-sided theoretical perspective, in which firms’ job offer and workers’ job acceptance decisions are disentangled. Minimum wages reduce job offer incentives and increase job acceptance incentives. We show that sufficiently low minimum wages may do no harm to employment, since their job-offer disincentives are countervailed by their job-acceptance incentives.

The Securities and Exchange Commission has proposed rules that will implement the crowfunding exemption set forth in the JOBS Act. See SEC File No. S7-09-13. Once implemented, the exemption will allow non-reporting companies to use crowdfunding to raise equity. The SEC’s proposal, however, raises a number of issues, including: (A) concerns over reliance on the “collective wisdom of the crowd” as a substitute for traditional investor protections; (B) concerns over reliance on investor self-certification as a means of enforcing the investment limits for individual investors; (C) the inconsistency of the proposed method of calculating the offering limits applicable to issuers with the requirements of the JOBS Act; (D) concerns over the elimination of the integration doctrine; (E) the need to address and include persons in civil unions/civil partnerships within the definition of family member; and (F) the need to require the filing of Form Funding Portal in an interactive format. The attached paper analyzes all of these issues.

The data in this appendix lists the companies in the Fortune 500 with women CEOs as of January 2014. The data examines the number of directors on each board and the number of women directors on each board. The data computes the percentage of women directors for a all companies listed and the percentage of women directors for all companies that had a women CEO for at least one year.The paper "The Demythification of the Board of Directors" to which these Appendices apply is available at the following URL:: http://ssrn.com/abstract= 2474394.

The SEC has proposed a number of changes to Regulation D. These include: a requirement to file a Form D prior to the use of a general solicitation under Rule 506(c) and a closing amendment for any offering relying on Rule 506; the imposition of a penalty for the failure to file the Form D in the form of a one year time out for offerings under the Rule; the inclusion of legends and other disclosure in solicitation materials; and, on a temporary basis, the obligation to file solicitation materials with the Commission. The Release also proposes a number of changes to the content of Form D and describes a "work plan" that will be undertaken by the staff to determine the "effectiveness of Rule 506(c)." The reforms are designed to facilitate investor protection. The Proposal also represents an effort by the SEC to use empirical data to drive regulatory reform. The comment letter notes this phenomenon and discusses the conclusions that can be drawn from the data. The letter also points out ways in which the data collection process can be improved and discusses the need for the Commission to make greater use of interactive data in accordance with a recommendation of the SEC’s Investor Advisory Committee.

Required by Dodd-Frank, the SEC has proposed rules that would extend bad actor provisions to Rule 506 of Regulation D, the safe harbor for private placements. Currently the provisions apply only to exempt offerings under Regulation A and Rule 505 of Regulation D. In the rule proposal, the SEC asked whether the bad actor provisions should be extended to the safe harbor for seed capital contained in Rule 504 of Regulation D. Extending the bad actor provisions to Rule 504 would help prevent the use of the rule by recidivists. Nonetheless, the Commission should not simply apply the bad actor provisions to the rule in an effort to ensure uniformity. Instead, bad actor provisions included in Rule 504 should be specifically designed to prevent certain types of registration abuses that often implicate the rule. To do so, the Commission should consider expanding the bad actor provisions to include additional categories of persons such as those lawyers and transfer agents that have been sanctioned for certain specified violations of the federal securities laws. Carefully crafted bad actor provisions will likely reduce instances of fraud while leaving unaffected the attributes of Rule 504 that make it attractive to small businesses seeking to raise seed capital.

In Section 952 of Dodd-Frank, Congress gave the Securities and Exchange Commission the authority to adopt a rule that required stock exchanges to implement listing standards regulating the compensation committees of the board of directors. In accordance with this provision, the Commission in Exchange Act Release No. 67220 (June 20, 2012) adopted Rule 10C-1. The Rule directed the exchanges to adopt the requisite listing standards. These standards were required to include the "relevant factors" that had to be considered in determining the independence of directors on the compensation committee. This letter recommended, among other things, that in articulating these factors, the exchanges specify the need to consider fees paid to directors for their service on the board and the need to consider personal and business relationships among directors and executive officers.

Consistent with Rule 10C-1, the NYSE and NASDAQ have proposed listing rules designed to regulate compensation committees of the board of directors. The two proposals, among other things, address the factors that must be considered in determining director independence. These comment letters, among other things, assert that the exchanges must explicitly require the consideration of fees paid to directors for service on the board and personal or business relationships between directors and executive officers.

The role of blogging in legal academia has been much debated. Some view the discipline as the antithesis of scholarship, a medium that allows faculty to broadcast ignorant or confused opinions. Others have viewed blogging by law faculty more favorably, focusing on the approach as a means of promoting traditional scholarship. While the debate has been ongoing, the matter has largely been resolved by actual practice. In the realm of legal scholarship, faculty law blogs are a disruptive innovation. Disruptive innovation usually connotes the introduction of a new technology that eventually destabilizes an existing market. Often, the technology, when introduced, is inferior and not perceived as a threat. Over time, however, the technology improves and migrates from a market niche and becomes the reigning standard. Law faculty blogs arose in a state of nature and were often perceived as inferior technology used by faculty to convey random, often personal, views. Over time, however, a recognized class of law faculty blogs emerged, with at least one having been cited 45 times in court opinions and another having been cited by over 700 times in assorted legal publications. Widely read and regularly cited, they offered a superior method for the rapid dissemination of some types of legal analysis and facilitate the introduction of ideas into an ongoing debate. They also provide a form of intermediation that discourages low quality posts. Law faculty blogs provide a form of scholarship that fills a gap left by traditional law reviews. Law faculty blogs overcome the slow publication process and dense analysis that often prevents traditional law review articles from playing a role in an ongoing debate. Said another way, law faculty blogs have altered the continuum of legal scholarship and reduced the role of traditional law reviews. Efforts by law reviews to fight back through the implementation of online supplements has so far failed. Law faculty blogs have also had a disruptive impact on the determination of faculty reputation. Blogging allows law professors to route around the traditional indicia of reputation such as the frequency of publication in elite law journals. Providing a “prominence” dividend, faculty who blog are able to advertise their expertise through substantive posts and become better known to practitioners, academics and decision makers. This type of reputational benefit can be seen from the correlation between sustained blogging and SSRN downloads. Blogging can also disrupt law school rankings. With reputation the single largest component in the rankings, law blogging can be used by some law schools to increase name recognition in a cost effective manner. In other cases, blogging can increase awareness of a law school’s faculty, elevating the overall reputation of the institution. Both can improve a law school’s relative rank.

Small Business Administration (SBA) loans have long been one of the most significant policy interventions in the U.S. affecting firm behavior, but little is known about their outcomes. This paper estimates the effects on employment using a list of all SBA loans linked to annual data on all U.S. employers from 1976 to 2010. Our methods combine firm fixed-effect regressions with matching on exact firm age, industry, year, and pre-loan size, and on propensity scores as a function of four years of employment history and other variables. The results imply positive average effects on loan recipient employment of about 25 percent, or 3 jobs at the mean. Including loan amount, we find little or no impact of loan receipt per se, but an increase of about 5.4 jobs for each million dollars of loans. Similar results for high-growth counties and industries suggest the estimates are not driven by differential demand conditions across firms. Exploiting variation in the distance of controls from recipient firms, we find only very small displacement effects. In all these cases, the results pass “placebo” and “pre-program” specification tests. Other specifications using only matching or only regression imply somewhat higher effects, but they fail these tests. The estimates facilitate calculations of total job creation by the SBA and of the cost per job created.

Blogging by law faculty has been going on for more than a decade. During that period, law faculty blogs have become widespread. They have also been increasing used as authority in law review articles and court decisions. The attached paper sets out the empirical data that shows who, as of May/June 2012, is actually blogging at various law schools. This is a notoriously difficult data set to create since there is no single list of law faculty blogs. Moreover, some faculty blog at non-faculty blogs. The data in this document includes a breakdown of the number of law faculty bloggers by law school. Interestingly, most law faculty bloggers are at law schools outside the top 50 as ranked by US News. In addition, the data includes the number of citations for law blogs in both law reviews and court opinions. One law faculty blog has over 700 citations in law reviews. Another has over 40 citations in cases.Finally, the data includes a list of US law faculty in the top 200 of SSRN downloads for May 2012. The list includes any blogging affiliation of these faculty. The data shows that for faculty in the list but outside the top 10 law schools (based upon the ranking created by US News) many of them blog, suggesting that there is a correlation between blogging and SSRN downloads.

The role of the Securities and Exchange Commission in the corporate governance process has shifted dramatically in recent years. The Commission has increasingly supplanted state law in determining substantive standards of corporate governance. The replacement of states with the Commission will have significant consequences. For one thing, the regulatory philosophy will change. For another, governance practices will become increasingly politicized and volatile. The volatility will be less apparent with respect to rulemaking and more apparent with respect to staff interpretations, particularly those under Rule 14a-8, the shareholder proposal rule. This is particularly clear in connection with changes to the interpretation of the “ordinary business” exclusion in Rule 14a-8. As a case study, the piece examines the phenomena in the context of proposals calling for shareholder approval of outside auditors. In 2005, the staff abandoned more than 50 years of consistent interpretation and found that proposals calling for shareholder ratification of auditors could be deleted from proxy statements under the “ordinary business” exclusion. The explanation for the shift is less likely changes in SOX that gave audit committees of some public companies the authority to select auditors and more likely a desire to reflect the views of the Commission.Volatility imposes costs. The article recommends a number of changes to Rule 14a-8 that are designed to reduce staff discretion and the risk of political shifts in practice.

Business Roundtable v. SEC, arose out of a legal challenge to what is probably the most controversial rule ever adopted by the Securities and Exchange Commission (SEC or Commission). Rule 14a-11 mandated that public companies allow long term shareholders to include nominees for the board of directors in the company’s proxy statement. The rule held out the promise that shareholders would be able to more easily nominate and elect their own candidates to the board. Access was popular among shareholders and strenuously opposed by public companies.The DC Circuit struck down the rule, imposing a “nigh impossible” standard with respect to the applicable economic analysis. The decision far exceeded the standards set out by Congress and the courts with respect to cost/benefit analysis. Moreover, in making its decision, the panel relied on mistaken interpretations of the fiduciary obligations of both boards and pension plans. The short term impact of the decision is to make more difficult the implementation of a shareholder access rule. The long term implications are more severe. The decision effectively discourages the SEC from using rulemaking as a means of establishing legal requirements and instead encourages the use of more informal and less uniform methods such as no action letters and enforcement proceedings.

Boards of public companies are not diverse. As this piece explains, the lack of diversity can be traced to a rational strategy by management of neutralizing the board in order to reduce the risk of intervention in corporate affairs. Neutralization in part involves the designation of directors who will “reliably” support the policies of management. At one time, reliability was assured through the appointment of officers and other persons with significant economic ties to the company. With the rush toward board independence, however, these types of “reliable” directors have largely been eliminated. Instead, they have been replaced by other categories that meet both the porous definition of director independence and the criteria for reliability. These categories include friends of management and current or former executive officers, particularly other CEOs. The need for “reliable” directors explains the lack of board diversity. Directors are not chosen for their unique perspectives or diverse backgrounds but for their predictability in supporting management. The absence of diversity, in turn, largely prevents boards from assuming any meaningful advisory role. Providing managers with effective advice requires directors who are informed and who possess diverse viewpoints. Both are inconsistent with the goal of neutralization. Boards have the authority to impose an advisory function on management. An advisory function will only be effective, however, if accompanied by structural reforms to the board. In particular, this requires changes in the selection criteria for directors. To ensure the effectiveness of any advice provided, directors must be informed and diverse. Diversity encompasses gender and race, two categories heavily represented among consumers but not among directors. It also includes persons with views and backgrounds at variance with management. Diversity, therefore, must replace reliability as the most important criteria for board membership. The impact of neutralization on diversity likely explains a conundrum with respect to board membership. Data has not consistently shown that racial or gender diversity on the board improves performance. These studies, however, examine diversity in the context of monitoring boards that do not exercise a meaningful advisory function. Diversity will be the most valuable for boards performing a meaningful advisory function. Until the function becomes mandatory, therefore, diversity is likely to have reduced impact on performance.

This paper investigates the origins of productivity leaders, those that operate close to and help push out the production frontier. Do such businesses emerge as top performers from the very beginning of their lives, for example as the consequence of an outstanding founding idea, technology, or location? Or, at the other extreme, do they appear initially as completely average (or even underperformers) that exhibit gradual improvement as they learn and develop with age? To answer this question we draw upon five decades of U.S. Census of Manufacturing (CM) establishment-level data, tracing the productivity leaders of the most recent CM (2007) back over their observed life spans. We also examine possible industry-level correlates of variation in the extent of nature versus nurture that are suggested by theories of industry dynamics and economic growth.

Why have economic reforms aimed at reducing the role of the state been successful in some cases but not others? Are reform failures the consequence of leviathan states that hinder private economic activity, or of weak states unable to implement policies effectively and provide a supportive institutional environment? We explore these questions in a study of privatization in postcommunist Russia. Taking advantage of large regional variation in the size of public administrations, and employing a multilevel research design that controls for pre-privatization selection in the estimation of regional privatization effects, we examine the relationship between state bureaucracy and the impact of privatization on firm productivity. We find that privatization is more effective in regions with relatively large bureaucracies. Our analysis suggests that this effect is driven by the impact of bureaucracy on the post-privatization business environment, with better institutional support and less corruption when bureaucracies are large.

After more than a half century of judicial monopoly, Congress in 2002 adopted Section 1658(b), thereby creating a statute of limitations and repose for fraud actions brought under Section 10(b) and Rule 10b-5. The five year period of repose represents an outside cut-off that commences at the time of the violation. The two year limitations period begins upon “discovery of the facts constituting” the fraud. See 28 U.S.C. § 1658(b). Under the self-evident meaning of this language, the limitations period begins only when plaintiffs discover - that is, actually know - that they have been defrauded. The legislative history confirms this actual-knowledge standard. The limitations period was not meant to be used to investigate whether a fraud occurred, but to address the “obstacles” that exist “after the fraud is discovered,” including the need to unravel the complexities of the violation and address the logistical concerns in bringing a claim, particularly the need to marshal the facts sufficient to meet the heightened pleading standards set out in the Private Securities Litigation Reform Act of 1995, Pub. L. No. 104-67, 109 Stat. 737 (PSLRA). See S. Rep. No. 146, 107th Cong., 2d Sess. 9 (May 6, 2002). This Court in Lampf adopted an actual-knowledge, not an inquiry-notice, standard for determining the accrual date of the one year limitations period. This was apparent from this Court’s express reliance on Section 9(e) of the Exchange Act, 15 U.S.C. § 78i(e), with its actual knowledge standard, as the appropriate model, and the explicit rejection of Section 13 of the 1933 Act, with its inquiry notice standard. Lampf’s reliance on an actual knowledge standard was also apparent in this Court’s treatment of equitable tolling. Tolling had allowed courts to ensure fairness by using equity to delay the accrual date where plaintiffs were unaware of the fraud through no fault of their own. Lampf concluded, however, that equitable tolling would henceforth be “unnecessary,” an approach that could only be understood as a direct consequence of an accrual standard that depended upon plaintiffs’ actual knowledge of the fraud. With plaintiffs aware of having been defrauded, a tolling doctrine designed to provide additional time to uncover the violation had become superfluous or “unnecessary.” The actual-knowledge standard does not interfere with the goals of finality and the elimination of stale claims. Those concerns are addressed through the adoption of a five year statute of repose. As for the assertion that the actual knowledge standard somehow allows plaintiffs to delay the onset of the limitations period through inactivity, this concern is misplaced. First, the modern realities of class action securities fraud suits against public companies provide considerable practical incentive to investigate the mere suspicion of a violation. Any delay in investigation could result in the expiration of the period of repose or the failure to meet the heightened pleading standards contained in the PSLRA. The possibility of deliberate inactivity is also belied by the competitive reality of class action securities litigation. SOX sought to increase the role of institutional investors, those plaintiffs with the resources available to conduct investigations. In addition, law firms that delay investigating the possibility of fraud could find themselves at a competitive disadvantage. The first firm to become aware of the fraud and discern the applicable class will be in a position to identify possible lead plaintiffs, the investors with the largest financial interest in the relief sought, increasing the potential likelihood that it will be designated lead counsel. See 15 U.S.C. § 78u-4. Second, a legal standard that determines actual knowledge through reference to the entire class will essentially eliminate even the possibility of the strategic use of inactivity. In the context of class actions against public companies for securities fraud, actual knowledge is most appropriately considered through resort to the information known to the class as a whole. To the extent known to the class, plaintiffs will be unable to rely on their own unawareness to delay the onset of the limitations period. This also provides plaintiffs with an additional incentive to investigate even the possibility of fraud in order discover facts known to the market. This use of the inquiry notice standard on the one hand permits the elimination of potentially meritorious claims and on the other hand encourages the filing of meritless claims. Meritless claims do more than waste resources. They open plaintiffs and their counsel to the possibility of sanctions under Rule 11. See 15 U.S.C. § 78u-4(c)(making mandatory consideration of sanctions under Rule 11 upon final adjudication of a securities fraud action).

The Securities and Exchange Commission has proposed a rule that would allow certain shareholders to include their nominees for the board of directors in the company's proxy statement. Called shareholder access, the effort has drawn considerable opposition. Those disagreeing with the effort often point to the widespread adoption of majority vote provisions and the recent amendments to the Delaware Corporation Law expressly authorizing access bylaws as evidence that the initiative is unnecessary. This letter responds to those arguments, contending that neither majority vote provisions nor the amendments to the DGCL in fact negate the very strong need for shareholder access.

Do firms employing undocumented workers have a competitive advantage? Using administrative data from the state of Georgia, this paper investigates the incidence of undocumented worker employment across firms and how it affects firm survival. Firms are found to engage in herding behavior, being more likely to employ undocumented workers if competitors do. Rivals' undocumented employment harms firms' ability to survive while firms' own undocumented employment strongly enhances their survival prospects. This finding suggests that firms enjoy cost savings from employing lower-paid undocumented at workers wages less than their marginal revenue product. The herding behavior and competitive effects are found to be much weaker in geographically broad product markets, where firms have the option to shift labor-intensive production out of state or abroad.

In the shareholder governance area, one of the most contentious issues concerns the right of shareholders to nominate directors and include the nominees in management's proxy statement. This article examines the conflict in the context of the growing importance of independent directors. State law and the Securities and Exchange Commission (SEC) have increasingly relied upon independent directors to protect shareholders and ensure the integrity of the financial disclosure process. Yet because of weak definitions and problems of enforcement, these directors are often not truly independent. One method of addressing these concerns is to allow shareholders to nominate and elect their own candidates. They have the power to nominate under state law but the authority has largely been emasculated by the need to solicit proxies, an expensive and time consuming process. The SEC has from time to time sought, always unsuccessfully, to amend the rules to allow shareholders some access to the company's proxy statement for their nominees, with the first effort taking place in 1942. The article contains a comprehensive analysis of these efforts, including the most recent iteration in 2007 when the Commission reaffirmed its traditional position that shareholders should not have access to the company's proxy statement for nominees. The article takes the position that in an era of activist shareholders, pressure on the SEC to reform its rules will continue to grow. Moreover, continued denial of access will make things worse, leading to efforts by activist shareholders that are more intrusive and more likely to result in contests for the board of directors. The denial of access also leaves in place a serious gap in the disclosure regime for proxy contests. Finally, as the SEC becomes increasingly involved in the corporate governance process, a role it has not historically had to consider, the denial of access raises questions about the agency's willingness to protect the interests of shareholders.

Corporate law scholarship is replete with those who favor an enabling approach to regulation, with companies having the right to opt in to particular requirements or regimes. Opting in (or out) permits private ordering and allows for efficient relationships that are a product of bargaining between owners and managers. This paper tests the core claim of scholars in the nexus of contracts tradition - that private ordering as a process of bargaining creates optimal rules. We do this by analyzing empirical evidence in the context of waiver of liability provisions. The article examines the history of these provisions, emphasizing that they arose in Delaware not from an effort to overturn Van Gorkom but from a decision to intervene in the market for D&O insurance. In other words, their genesis was owed to a desire to interfere with market forces with respect to insurance. The Delaware model allowed companies to opt in to a regime that eliminated monetary damages for breach of the duty of care through amendments to the articles of incorporation. The contractarian approach would suggest that shareholders and management would use this authority to negotiate agreements that are in their mutual best interests. If a process of bargaining is at work as they claim, the opt-in process ought to result in a variety of practices, with some companies adopting waiver of liability provisions, others not, while still others modify the provisions to only waive liability in particular circumstances. These provisions, therefore, represent a laboratory for determining whether, and the degree to which, bargaining to achieve more efficient private arrangements actually occurs. Our analysis reveals that the diversity predicted by a private ordering model is not borne out by the evidence. Instead, the evidence shows that one categorical rule (liability for breach of the duty of care) was merely replaced by another (no liability for a breach of the duty of care), with no evidence that the change increased efficiency. The article demonstrates that bargaining does not take place as the contractarian thesis would predict and that the so called private ordering does not necessarily result in greater efficiency.