Imagining worse than reality: comparing beliefs and intentions between disaster evacuees and survey respondents1

We often credit disasters, and their coverage in the media, with changes in the public perception of risk associated with low-probability, high-consequence events (LPHCs). With a change in perceptions, we also expect changes in beliefs, preferences, and behaviors. Do beliefs and behaviors change in different ways for people who live through these LPHC critical events, as opposed to people who observe them? This study compares hypothetical hurricanes with actual hurricane effects in a survey quasi-experiment. Findings indicate that hypothetical disasters induce stronger reactions than those experienced in the natural world, as Hurricane Katrina bystanders imagine themselves incurring much higher damages, and being much less likely to return to live in their hurricane-damaged homes, than actual Hurricane Katrina evacuees. Ultimately, respondents considering a hypothetical low-probability, high-consequence event exhibit exaggerated beliefs and opposite decisions of those who actually lived through one of these events. Results underline the importance of examining the differences between public perceptions and experiential reality.     

On the constitution of audit committee effectiveness

Pressures to perform and be effective are significantly influential within contemporary society, including within the realm of corporate boards of directors and audit committees. This paper adopts a social constructivist approach to better understand the process by which meanings regarding audit committee effectiveness are internally developed and sustained, within the small group of people who attend audit committee meetings. We conducted the investigation through interviews in three large Canadian public corporations listed on the Toronto Stock Exchange.     

What do boards really do? Evidence from minutes of board meetings

We analyze a unique database from a sample of real-world boardrooms — minutes of board meetings and board-committee meetings of eleven business companies for which the Israeli government holds a substantial equity interest. We use these data to evaluate the underlying assumptions and predictions of models of boards of directors. These models generally fall into two categories: “managerial models” that assume boards play a direct role in managing the firm, and “supervisory models” that assume that boards monitor top management but do not make business decisions themselves. Consistent with the supervisory models, our minutes-based data suggest that boards spend most of their time monitoring management: approximately two-thirds of the issues boards discussed were of a supervisory nature, they were presented with only a single option in 99% of the issues discussed, and they disagreed with the CEO only 2.5% of the time. Nevertheless, at times boards do play a managerial role: Boards requested to receive further information or an update for 8% of the issues discussed, and they took an initiative with respect to 8.1% of them. In 63% of the meetings, boards took at least one of these actions or did not vote in line with the CEO. Taken together our results suggest that boards can be characterized as active monitors.     

Die Corporate Governance der Versicherungsvereine auf Gegenseitigkeit

Contrary to the first appearance the current corporate governance discussion is not limited to listed stock companies. The mutual insurance companies have to observe their management and control systems as well. Their corporate governance system does barely dispose of external control mechanisms, it instead relies heavily on the close cooperation of the executive directors, the board of directors and the members’ representatives. Yet, this proximity of controlled management and controllers can be potentially dangerous. A supervision by its ordinary members does not occur. Member-unfriendly election regulations for the representatives’ committee as well as a generally declining interest to exercise one’s membership rights in the mutual insurance company have led to a downward spiral that has to be broken through. This idle potential for control has to be reactivated. Members have to take an interest in their mutual again. This could probably be achieved by reintroducing plenary meetings. Apart from the classic meetings that exact the presence of a member to exercise its voting rights it might be worthwhile to consider allowing an online-participation or to arrange decentralised meetings to increase their attractiveness for members.     

中国核安全解析

2011年日本福岛核事故之后我国进行了历时一年的核安全大检查,日前该检查报告已经公布并征求意见。本刊特别邀请曾经参与福岛核事故调查以及我国核安全检查的核专家,就人们对我国核电安全性普遍关注的几个问题予以详细解答     

Attendance of board meetings and company performance: Evidence from Taiwan

This paper empirically investigates board meeting attendance and its effects on the performance of Taiwanese listed corporations. Directors with higher qualifications attend board meetings more often by themselves. The ownership of the largest shareholder of a company also has a positive effect on director’s own meeting attendance. High meeting attendance by directors themselves can enhance a firm’s performance but high attendance by their representatives has an adverse effect. Independence of directors or a board is also positively associated with firm performance. These results largely hold even when the sample is decomposed to count for different ownership structures and director types.     

Audit committee composition and the use of an industry specialist audit firm

Independent, competent boards of directors and audit committees are said to be important mechanisms of corporate governance. The purpose of the present study is to empirically examine the association between audit committee composition and audit quality. Specifically, the link between the proportion of non‐executive directors on an audit committee, financial qualifications of directors and the number of audit committee meetings held in a year are investigated and expected to have a positive association with the quality of the audit firm used. Audit quality is proxied by industry specialization. The results support the link between a higher proportion of non‐executive directors on an audit committee and use of an industry specialist audit firm. Other measures of audit committee quality (those with a higher proportion of directors with financial qualifications and those that meet more frequently) are not significantly associated with the use of an industry specialist audit firm. Sensitivity analysis shows that the presence of an audit committee is linked to use of an industry specialist audit firm.     

社会主义改造时期内蒙古牧区经济发展的历史经验及启示

社会主义改造时期,内蒙古共产党工作委员会和自治政府在牧业区的一切工作,都要以有利于发展畜牧业生产、改善人民生活为出发点,规定了积极发展包括牧主经济在内的畜牧业经济总方针,制定并实施了一系列的方针、政策和措施。论文对这些方针政策的历史经验及其对内蒙古新牧区建设的启示加以探究。     

The new world disorder

On January 1, 1995, representatives from 76 countries signed the World Trade Organization charter, which for years had been part of a temporary trade agreement. The WTO's emergence as a fully empowered supranational body seemed to reflect the triumph of what the first President Bush had described as the "new world order." That order was based on two assumptions: that a healthy economy and a sound financial system make for political stability, and that countries in business together do not fight each other. The number one priority of U.S. foreign policy was thus to encourage the former Communist countries of Europe and the developing nations in Latin America, Asia, and Africa to adopt business-friendly policies. Private capital would flow from the developed world into these countries, creating economic growth. It sounded too good to be true, and so it proved. The new world order of Bush père and his successor, Bill Clinton, has been replaced by the new world disorder of Bush fils. Under the second Bush's administration, the economic and political rationale-behind the Washington consensus of the 1990s has unraveled, forcing a radical change in our perceptions of which countries are safe for business. Negotiating this new environment will require companies to more rigorously evaluate political events and more carefully assess the links between political, economic, and financial risk factors. They'll need to be more selective about which markets to enter, and they'll need to think differently about how to position themselves in those markets. The geopolitical events of the past year, the Bush administration's global war on terror, as well as ongoing convulsions in traditional political and economic relationships must be understood and managed by corporate leaders worldwide. With careful analysis, business leaders can increase their companies' visibility and better respond to the uncertainties of the new world disorder.     

Changes to Income Trust Taxation in Canada: Investor Reaction and Dividend Clientele Theory

Abstract:  This paper explores the relationship between tax-induced dividend clientele theory and the recent changes to the taxation of income trusts in Canada. On October 31, 2006, the Canadian government announced the Tax Fairness Plan ( TFP ) calling for the elimination of the considerable tax advantage enjoyed by income trusts. Generally, distributions from income trusts are now taxed at rates comparable to those imposed on corporate dividends. We examine market reaction to the  TFP  to address three issues: first, whether the valuation effect of a dividend tax increase is consistent with the traditional or the new view of dividend taxation; secondly, whether the market reaction to tax increases has a differential impact on firm value that is related to the tax preferences of taxable, tax-exempt, and foreign investor tax clienteles; and thirdly, whether firms change their dividend policies in response to the preference of institutional investors (tax-based dividend policy effect) or whether institutional investors are sorting themselves across firms based on their dividend policies (investor sorting effect). Our results provide strong evidence as follows. First, the valuation effect in reaction to the  TFP  announcement is consistent with the traditional view of dividend taxation – i.e. that taxes on dividends reduce the net return to investors, increase the firm's cost of capital and lower the firm's ability to access capital markets, thereby discouraging investment and savings. Secondly, we saw that trusts with a larger percentage of their units held by tax-exempt, low-tax, and foreign investors had a higher decline in value when compared with trusts held mostly by ordinary taxable investors. These results support dividend tax clientele theory. Finally, we observed changes in institutional investor clienteles consistent with the investor sorting effect.     

基于极端分位回归的股市收益与交易量相依性研究

依据中国行业股市收益和交易量时间序列数据,引入政策效应变量,运用分位数回归理论时间序列模型,考量股市收益与交易量相依性关系.结果显示,中国行业股市收益与交易量之间相关关系存在差异,且在高分位点呈现正相关,在低分位点呈现负相关.结果表明,中国股市投资者存在显著的羊群效应,政策效应对不同行业收益和交易量相依性的影响存在异质性.鉴此,投资者宜减少部分行业股票配置,政府应建立高效的风险管理机制,尽量减缓股市波动.     

Valuing Government Obligations When Markets Are Incomplete

We simulate a 10‐period overlapping generations model with aggregate shocks to price safe and risky government obligations using consumption‐asset pricing. Agents cannot trade with future generations to hedge the model's productivity and depreciation shocks, and can only invest in one‐period bonds and risky capital. We find that the pricing of short‐ and long‐dated riskless obligations is anchored to the prevailing risk‐free return. The prices of obligations whose values are proportional to the prevailing wage are essentially identical to those of safe obligations, notwithstanding large macro shocks. On the contrary, government obligations in the form of options entail significant risk adjustment.     

Focal points for improving communications about electromagnetic fields and health: a mental models approach

Central to the precautionary policy is the provision of information about electromagnetic fields (EMF) technology, exposures, potential health risks and exposure management actions to the public. To meet this need at the broadest level, beyond the specific technology foci of previous research, a research project was commissioned as part of Dutch Electromagnetic Fields and Health Research Programme. This study provides an assessment of Dutch EMF information needs from an ensemble of sources by addressing people’s existing ideas and beliefs, using a mental models approach. A summary expert model of influences on and consequences of exposure derived from search of the relevant literature is informed by interviews with 15 scientists and professionals with diverse expertise. Although the professionals characterize the physical characteristics and psychological aspects of exposure to EMF in daily life similarly, there is no consensus regarding potential health effects. Interviews with 12 lay people followed by a confirmatory survey of the general Dutch public (n = 403) reveal not only wide variation in beliefs regarding potential health effects of EMF, but also overestimation of the amount of radiation from public sources relative to personal sources of EMF. People do not feel adequately informed by the government about EMF, and knowledge of government policies on EMF is limited. Together, the evidence suggests three focal points for improving EMF risk communications: providing more clarity regarding the uncertainty of evidence for health effects, illuminating personal EMF exposures in daily life and providing more accessible and transparent information on governmental policies.     

E-GOVERNANCE AS STRATEGY OF PUBLIC SECTOR REFORM: PECULIARITY OF JAPANESE IT POLICY AND ITS INSTITUTIONAL ORIGIN

As the cases of public sector reform and e-governance projects have shown, e-governance can play a role in public sector reform. This paper describes Japanese e-governance policy and its status, focusing on the issues affecting the government and the public. Japan has implemented a series of political and administrative reforms in order to improve accountability. NPM reforms utilize various strategies to manage public policies, and e-governance is a public policy that directly affects other policies and brings about change. Its characteristics as public policy are different from those of other policies, especially in relation to public accountability.     

补“砖头”、补“床头”还是补“人头”——基于浙江省某县养老机构的个案调查

本文通过对浙江省某县1家公办养老机构和1家民办养老机构的个案调查,探讨政府养老机构补贴政策的实施效果,并提出进一步改进补贴政策的建议。调查发现,该公办养老机构收费标准较低,其经营收入不仅低于完全成本,而且低于经营成本,政府通过多种形式对其建设和经营进行了"隐性补贴",这部分补贴事实上由实际入住的老年人所享受,而大部分最终入住该公办养老机构的老年人并非最需要得到补贴的低收入失能老年人。近年来,浙江省对民办养老机构实行按床位补贴建设费用的支持政策。作者对1家在上述政策背景下新成立的民办养老机构的调查发现,床位补贴政策的确一定程度上提高了民间开办养老机构的热情,但也还存在床位空置率高等问题。基于上述调研上,作者提出对低收入失能老人实行养老服务需方补贴,同时逐步减少对公办养老机构的运营和建设补贴,对民办养老机构根据其收养的低收入失能老年人人数实行运营补贴等建议。     

Audit committee diligence around initial audit engagement

Studies focusing on governance mechanisms argue that auditor monitoring is one of several governance mechanisms that exist in the firm, and these mechanisms supplement each other. Extending this argument, I examine whether firms support auditor monitoring with audit committee monitoring when auditor oversight is deemed to be weak. Prior auditing literature argues that audit quality is affected by auditors' lack of familiarity with their clients' activities. Since lack of auditor–client familiarity exists in the first year of auditor–client tenure, I examine whether firms increase their audit committee monitoring during the year of auditor change. For a sample of firms that changed auditors between 2006 and 2012, the findings show that audit committees meet more frequently in the first year of audit engagement. Further tests show that firms' past reporting behavior play a significant role in the demand for more audit committee meetings and the increase in the audit committee meetings in the initial year of auditor engagement positively affects reporting quality.     

The dollar and its discontents

Has the US dollar delivered the benefits that the rest of the world is expecting from its holdings of international liquidity? US government debt has been liquid and safe, and it is supplied in sufficient quantity. But it has given a low return to the countries that accumulated the most reserves, especially when those returns are measured in terms of the countries' own consumption. I argue in this paper that the countries that accumulate the most reserves should expect a low return in terms of their own consumption, and that there is little that international monetary reform can do to change that fact.     

Relation between external audit fees, audit committee characteristics and internal audit

This study examines whether the existence of an audit committee, audit committee characteristics and the use of internal audit are associated with higher external audit fees. Higher audit fees imply increased audit testing and higher audit quality. We find that the existence of an audit committee, more frequent committee meetings and increased use of internal audit are related to higher audit fees. The expertise of audit committee members is associated with higher audit fees when meeting frequency and independence are low. These findings are consistent with an increased demand for higher quality auditing by audit committees, and by firms that make greater use of internal audit.     

Think tanks—Who needs them?: Advising a government in a democratic society

In democratic societies the government may be advised on policy problems by bodies of individuals not part of the government. These bodies are called external advisory bodies and are composed of either individuals representing a group in society or individuals representing themselves. For example, the Netherlands Social Economic Council (SER) is composed of representatives from the labour unions and the employer organizations and of crown appointees. This article looks at the contribution these bodies can make to the functioning of a democratic society. It focuses on the role of the Netherlands Scientific Council for Government Policy.     

Forecasting the PSBR Outside Government: The IFS Perspective

Expectations regarding the future state of the public finances are vital for public policy formation. The UK experience has been that forecast of the PSBR have been beset with problems since the mid-1980s. Independent assessments of the accuracy and plausibility of public finance forecasts are an important check on government forecasts and serve to increase public debate over government finance issues. We examine the success of various possible methods available to those outside government. JEL classification: E6, H1, H6.