Conflicts of Interest Arising from the Prudent Investor Rule: Ethical Implications for Over-the-Counter Derivative Securities

The Prudent Investor Rule creates a potential ethical dilemma for investment advisors selling over-the-counter financial products issued by their firms. The "opportunity" to defraud investors using complex, over-the-counter derivative securities designed for client-specific risk management is much higher than for exchange traded securities. This paper emphasizes the ethical responsibility held by trustees and their organizations to eliminate potential conflict of interests through internal control and monitoring. Independent evaluations of the performance of investment advisors and independent appraisals of complex over-the-counter securities are important in reducing the risks of conflicts of interest. Recent lessons learned from the corporate ethics crisis and requirements of the 2002 Sarbanes Oxley Act would suggest that conflict of interest must be eliminated with third party validation of derivative pricing. By performing due diligence and validation, the trustee is able to satisfy the requirements under the Prudent Investor Rule.     

Small business formation by unemployed and employed workers

This paper uses data from the Current Population Surveys for 1968–1987 and from the National Longitudinal Survey of Young Men to examine the relationship among unemployment and small business formation and dissolution for white men and women. We find that self-employed workers are more likely to have experienced unemployment than are wage workers because their higher entry rate into self-employment offsets their higher exit rate out of self-employment. Unemployed men and women who enter self-employment experience a larger drop in their earnings than the unemployed who return to wage work.The authors are Vice President, National Economic Research Associates and Associate Professor, Fordham University, respectively. This research was supported by the U.S. Small Business Administration under contract no. SBA-2102-AER-87. We retain responsibility for the views expressed below.     

State of the science: violence prevention efforts in developing and developed countries

Violence is an important global public health problem that claims the lives of over 1.6 million people each year and results in numerous other health and social consequences. It is also a preventable health problem. This paper provides an overview of the current status of prevention efforts in developing and developed countries, describes what is known about the effectiveness of different approaches and highlights some of the important challenges in building the evidence-base for violence prevention programmes. Research conducted to date shows an imbalance in the emphasis of prevention programmes across the different types of violence. This imbalance is reflected in the timing of response, the nature and level of influence of interventions and programmes and the outcomes studied. Promising and effective approaches have been identified, but many more still require rigorous testing, particularly in developing countries. The current state of the science in violence prevention reveals both progress and a number of remaining challenges.     

Climate change in Northern Sweden: intra-regional perceptions of vulnerability among winter-oriented tourism businesses

Climate change is a potential threat to society and business. Although research has noted that the tourism sector may be robust on the macro scale, significant losses at local levels have been suggested. This paper examines Upper Norrland, in Northern Sweden, by measuring the perceptions of winter-oriented tourism entrepreneurs. Their perceptions of potential threats from climate change are assessed, including how entrepreneurs view the future, in terms of climate change impacts and sustainability of the region as a winter-tourism destination. A quantitative survey of entrepreneurs (n = 63) gave responses along geographical and operator dimensions to reveal local differences within the Upper Norrland region, showing the coastland to be perceived as more exposed to change than inland areas. Venue-based businesses see climate change as a higher priority than activity-based, potentially mobile, businesses, regardless of their location. The general perception among businesses is that climate change will not drastically impact the tourism sector over the next 10 years. A basic model for mapping local differences is outlined to stimulate further study of the under-researched intra-regional nuances in climate change and tourism research. A case is made for regional planners to use this tool and to educate local businesses on adaptation techniques.     

A gendered look at entrepreneurship ecosystems

Small Business Economics - Underlying entrepreneurship ecosystems is the implicit assumption that all entrepreneurs have equal access to resources, participation, and support, as well as an equal...     

A multidimensional perspective of SME internationalization speed: The influence of entrepreneurial characteristics

This paper contributes to a multidimensional perspective on the speed of SME internationalization. It examines the influence of entrepreneurial characteristics – experience, rationales and innovation strategies – on multiple dimensions of internationalization speed. Findings from a sample of 180 SMEs show that earliness, speed of deepening, and speed of geographic diversification can be viewed as three different strategic alternatives and that each dimension is predicted by a different set of entrepreneurial antecedents. Earliness of internationalization is associated with entrepreneurs’ international business experience and their perception of opportunities abroad as well as preference for an innovation strategy characterized by ambidextrous innovation. Speed of deepening is related to entrepreneurs’ international business experience, their orientation towards differentiation vis-à-vis competitors, and commitment to innovation and a strategy focusing on exploration. These results indicate the importance of distinguishing between different forms of innovation. Speed of geographic diversification is predicted only by entrepreneurs’ orientation towards differentiation vis-à-vis competitors.     

Discussion of “A Theoretical Framework of Professional Accountants’ Identity Formation and Directions for Future Research”

Many researchers believe the tremendous industrial development over the past two centuries is unsustainable because it has led to unintended ecological deterioration. Despite the ever-growing attention sustainable supply-chain management (SSCM) has received, most SSCM research and models look at the consequences, rather than the antecedents or motives of such responsible practices. The few studies that explore corporate motives have remained largely qualitative, and large-scale empirical analyses are scarce. Drawing on multiple theories and combining supply-chain and business ethics literature, we purport that instrumental, relational, and moral motives are behind a firm’s engagement in SSCM practices. Specifically, we examine the links between corporate motives, SSCM practices, and firm performance. Using a sample of 259 supply-chain firms in Germany, we empirically test five hypothesized relationships. Our results reveal that relational and moral motives are key drivers, and that firms exhibiting high levels of moral obligations tend to outperform those primarily driven by amoral considerations. Findings of this study contribute to multiple literatures espousing sustainability management and can help policy makers, stakeholder groups, and scholars develop more robust strategies for encouraging firms to practice SSCM.     

Perceived competence mobilization: an explorative study of predictors and impact on turnover intentions

The present study explores predictors of perceived competence mobilization, as well as their direct and indirect impact on turnover intentions. Findings from a survey of 840 employees of a public civil service organization support the predictions that perceived competence mobilization is positively related to intrinsic motivation, peer support and supervisor support, career system satisfaction, and pay system satisfaction. Moreover, findings indicate that there is a curvilinear relationship between self-efficiacy and perceived competence mobilization, and that medium levels of self-efficiacy are associated with higher levels of perceived competence mobilization compared to very low or very high levels of self-efficiacy. Furthermore, findings indicate that turnover intention is best predicted by intrinsic motivation followed by career system satisfaction, followed intrinsic motivation, and that perceived competence mobilization partly mediate the effects of some predictors.     

Sustainable Transport Policy: The Contribution from Behavioural Scientists

Publication of the UK Government's White Paper on Transport, in July 1998, has raised public awareness of the problems associated with widespread car use. The authors argue that these problems, which largely result from the aggregated choices and behaviour of many individual car uses, could be mitigated if the main determinants of car use and the underlying behavioural mechanisms were better understood. This article examines six strategies for changing social behaviour, and some important conditions for reducing car use. Examples are presented of how the insights gained can be applied in practice.     

The impact of an independent inspectorate on penal governance,performance and accountability: Pressure points and conflict “in the pursuit of an ideal of perfection”

This paper examines the impact of an independent Inspectorate on the enactment, of and accountability for, penal reform in the Australian State of Western Australia. Intended to improve system wide custodial outcomes through the introduction of a privately managed operator acting as standard bearer and innovator, the reform agenda was predicated on an overhaul of governance, performance, systems and reporting practices in the sponsoring department and the state's public prison network. Insights from three credos of imprisonment, theorizations of ‘hierarchical’ and ‘intelligent’ governance and accountability, the interplay of values in changing practice, and the ways in which inspectors establish particular inspection regimes, frame analysis of reform implementation and the inspection regime in action over a ten year period. Using archival material, this research examines how the Inspectorate, in making things auditable, altered perceptions and organizational realities of a network of actors. It is contended that the governance and accountability tensions inherent in managerialism, exemplified in its reliance on ‘neutral’ accounting technologies to incentivise, manage and monitor custodial outcomes, privilege instrumental hierarchical governance and accountability regimes that ignore the rehabilitative aspects of imprisonment. Further, conflicting publicly espoused and privately held values play vital roles in moulding performance in a penal setting, and are fundamental to changing outcomes in networks. The Inspectorate's public values and intelligent accountability regime resonate with the Department's policy objectives and public values, but are shown to have been initially inconsistent with network actors’ hidden private values. The research concludes that the appointment of an independent Inspectorate has facilitated the accountability of those responsible for prison quality and positively influenced the treatment of prisoners. A secondary concern is investigating conflicting propositions about the relative governance, performance and accountability of privately and publicly operated prisons.