The implementation of a code of ethics: The early efforts of one entrepreneur

Attention is being focused on the tone at the top in businesses in the United States with the publication of the Report of the Commission on Fraudulent Financial Reporting. There has been growing discontent with the quality of ethcial behavior in the business society and at the present moment many American companies are developing — or revising — codes of ethics and establishing procedures for their implementation. Yet, there is some question about the success of such efforts.This article describes the efforts of an early American entrepreneur to develop a code of ethics and to implement it throughout his organization during the early years of relatively rapid growth. The code was introduced in 1913 and was supported through a variety of means in which the leader himself participated. That early code continues to be reissued as the company updates its overall code of ethics. The persistent and seemingly genuinc commitment to ethical behavior throughout the company was evident in all aspects of the leader's behavior. Mary Ellen Oliverio (PhD, Columbia; CPA, New York State) is Professor of Accounting, Graduate School of Business, Pace University, New York, New York, 10038. She is the author of several textbooks and has had articles published in a number of professional journals, including the CPA Journal, Internal Auditor, and Internal Auditing. She is currently conducting a study on the role of the internal auditor in the performance of the external audit.     

Spatial productivity spillovers from public infrastructure: Evidence from state highways

Is public-sector infrastructure a key determinant of productivity? Traditional, project-based analyses of benefits and costs typically do not find large rates of return. Proponents of infrastructure spending instead point to regressionbased analyses of the links between private productivity and public infrastructure that imply large productivity effects from public spending. The disparity in estimated returns is often attributed to geographic spillovers in productivity benefits that are not captured by disaggregated analyses. We examine the degree to which state highways provide productivity benefits beyond the narrow confines of each state's borders. Despite the fact that state highways-especially the interstate highway system-are designed at least in part with interstate linkages in mind, we find no evidence of quantitatively important productivity spillovers.     

The Flemish government's responsibility for local government modernization

Abstract

Throughout Western Europe, local government is modernized. Central and regional governments carry responsibility for this modernization because they decide upon its nature. However, this responsibility reaches out further since a higher-level government also carries responsibility for the success of its modernization at the local level. The article unravels this responsibility for local government modernization in the case of the Flemish government. As a result of Belgian state reform, this government counts today as the most important higher-level government from the viewpoint of local government in Flanders.     

Trajectories for Modernizing Local Governance: Revisiting the Flanders Case

Local government plays a central but altering role in local governance. Together with the shift from a night-watchman state to a welfare state , the models of governance provision changed. Government itself became larger and more scattered throughout the local community. Moreover, government was no longer the only governance provider. Many actors were involved in governance with a diversity of steering relations. In our time, governance continues to change. What are the emerging models of local governance today? After sorting out some terminological and methodological issues, we describe four emerging ideal-type models (i.e. the holding model , the autonomous networks model , the implementation model and the reintegration model ), based on four societal scenarios (i.e. triumphant markets , hundred flowers , creative societies and turbulent neighbourhoods ). The models represent four possible local governance futures. Next, the models are applied on two management issues: organizational structure and financial management. Finally, some embryonic evidence is given on the emergence of the models.     

Demand articulation in intermediary organisations: The case of orphan drugs in the Netherlands

Several aspects of a technology are uncertain when it is in its emerging phase, e.g. the demand for a technology. Demand articulation processes are regarded as important, but till now it is often treated as a black box. We present a conceptual framework for the analysis of demand articulation processes inside intermediary organisations, and in interaction with other stakeholders. The empirical basis of this framework is provided by a case study involving an event history analysis, in which the occurrence and the contents of demands are followed over time. We studied the processes within the ‘Dutch Steering Committee Orphan Drugs’, an intermediary organisation that supports new and emerging technologies in the context of orphan drugs. Our results show that due to the activity of the intermediary organisation demand articulation occurred, that interactions exist between the demands and the organisation's underlying values, and that in interaction with other actors a debate on the reimbursement of new drugs is settled. The major contribution of this paper lies in the design of a framework for studying demand articulation processes in intermediary organisations and the resulting impacts on the development of emerging technologies. In addition, the paper provides insights in the possibilities to reinforce the role of the intermediary organisation studied.     

Can Sticky Price Models Generate Volatile and Persistent RealExchange Rates?

The central puzzle in international business cycles is that fluctuations in real exchange rates are volatile and persistent. We quantify the popular story for real exchange rate fluctuations: they are generated by monetary shocks interacting with sticky goods prices. If prices are held fixed for at least one year, risk aversion is high, and preferences are separable in leisure, then real exchange rates generated by the model are as volatile as in the data and quite persistent, but less so than in the data. The main discrepancy between the model and the data, the consumption–real exchange rate anomaly , is that the model generates a high correlation between real exchange rates and the ratio of consumption across countries, while the data show no clear pattern between these variables.     

Board Antecedents of CEO Duality and the Moderating Role of Country‐level Managerial Discretion: A Meta‐analytic Investigation

CEO duality reduces boards’ monitoring capacity. But governance substitution theory holds that boards of directors who can effectively monitor their CEOs are more likely to adopt the CEO duality governance structure. By examining relationships between board characteristics underlying their monitoring capacity and CEO duality, we bring evidence to bear on governance substitution theory. Further, by applying a managerial discretion theory lens to CEO duality, we extend governance substitution theory to the cross‐country context where institutional features vary in their constraints on managerial discretion. Meta‐analytic results from a dataset of 297 studies across 32 countries/regions provided support for the majority of our predictions. As predicted, board independence and certain types of board human capital were positively related to CEO duality. Unexpectedly, board ownership was negatively related to CEO duality. Additionally, country‐level managerial discretion significantly moderated the board independence‐ and human capital‐duality relationships (but not the board‐ownership‐duality relationship) as predicted.     

The Roles of Performance Measures and Monitoring in Annual Governance Decisions in Entrepreneurial Firms

This paper analyzes annual corporate governance decisions at firms making initial public offerings (IPOs) of common stock between 1996 and 1999. Our objective is to examine relations between firms' corporate governance decisions and the informativeness of available measures of managerial performance. We consider financial measures such as earnings and stock return, as well as direct monitoring. We collect a sample of IPO firms from the manufacturing, Internet, and technology (non-Internet) industries, and examine how the use of various performance measures in annual compensation grants and turnover decisions varies with the information environment of the firm and with the extent of venture capital influence. Consistent with prior research that finds earnings are of limited usefulness in firm valuation for Internet firms, we find Internet firms place less importance on earnings and greater importance on stock returns in determining compensation grants than do non-Internet firms. We also find that compensation grants of firms with little or no venture capital influence display significantly stronger association with accounting and stock performance measures than those of firms with more intense monitoring by venture capitalists. This result is consistent with direct monitoring and the use of explicit performance measures acting as substitute governance mechanisms.