Firm characteristics and audit committees complying with ’best practice‘ membership guidelines

This study investigates demand and supply characteristics associated with firms that voluntarily established audit committees meeting ‘best practice’ membership guidelines. We focus on a set of best practice criteria rather than on the separate elements of the best practice criteria as in past studies. We conduct our tests using a sample of New Zealand listed companies that, relative to firms in other capital markets, are smaller and have more concentrated ownership. This setting differs from prior research because we expect the costs of voluntarily achieving best practice to be reasonably high. The results show that demand factors are not significantly related to the presence of an audit committee that conforms with best practice membership guidelines. However, supply factors (i.e. those firms with larger and more independent boards) are more likely to form audit committees that meet best practice. These results suggest that compliance costs will be greater for firms with smaller and less independent boards of directors if they are required to comply with best practice requirements.     

The Year in Review: Economics at the Antitrust Division, 2005–2006

This paper covers the activities of the Economic Analysis Group (EAG) of the Antitrust Division, U.S. Department of Justice, during 2005–2006. It describes the economic analysis undertaken by EAG in several important investigations, appellate matters, and other activities as an advocate for competition.The views contained herein are solely those of the authors and do not necessarily represent those of the U.S. Department of Justice.     

Economics at the FTC: Office Supply Retailers Redux,Healthcare Quality Efficiencies Analysis,and Litigation of an Alleged Get-Rich-Quick Scheme

We discuss in this essay three of the matters on which economists in the Bureau of Economics (BE) at the Federal Trade Commission have worked this past year. BE revisited familiar ground in the first matter, a proposed merger of office supply retailers. The second part of the essay considers efficiency claims in health care mergers, with focus on the acquisition of a physician group by a health care system in Idaho. The final part of the essay discusses empirical work that was undertaken by the Bureau to investigate claims made by marketers of an alleged get-rich-quick scheme.     

Unpacking the black box of successful ICT-enabled service transformation: how to join up the vertical,the horizontal and the technical

This paper aims to understand what goes on in the black box of successful, joined-up ICT-enabled service transformation, where complex interactions and integration must occur among the horizontal processes internal to a joined-up service delivery network, the vertical top-down processes of the organizations involved, and the change processes caused by using ICTs. A new conceptual framework is developed and applied to an illustrative case study of successful, joined-up service transformation in New Zealand.     

International compliance with new Basel Accord principles for risk governance

We assess international compliance with the Basel Committee's 2010 guidance on governance of banking organisations. Based on an extensive examination of regulatory documents in selected advanced economies, we find that reform is incomplete in jurisdictions most affected by the financial crisis, and with the largest financial centres. In contrast, other countries less affected by the financial crisis have enacted risk governance reforms as protection against potential future contagion. We provide insights for policy‐makers charged with improving governance at banks, and a richer understanding for international regulators as they revise the guidelines and aim for greater compliance at the national level.     

Teaching the Implicit Assumptions Underlying Firm Behavior in the Neoclassical Model

The neoclassical model imposes narrow assumptions on firm behavior and in the process hides implicit assumptions regarding the behavior of individuals. Although the firm is a complicated organization composed of many individuals, the neoclassical model simplifies its behavior to one objective—the maximization of profits. This assumption implicitly assumes that individuals within the firm subordinate their own self-interest for the firm’s benefit. A classroom activity is described which assists students in discerning whether the assumption of profit maximization fits reality.     

The limits of the wage impact of discrimination

In spite of almost 40 years of active enforcement efforts by the EEOC, as well as the strong intervention by the plaintiff bar, the most popular benchmark by which we measure the influence of prejudice on wages paid to female and minority workers has changed very little. This paper maintains that to a large extent this seeming immunity of discriminatory wage gaps to the legal remedies provided by Title VII results from the mismeasurement of those effects. An alternative to the standard Oaxaca decomposition of the wage gap is offered which allows us to put plausible ranges around the true impact of antidiscrimination laws. Not only does this reduce the residual impact of the discrimination that appears to withstand Title VII remedies, it also suggests that the pre‐Title VII impact of discrimination on wages accounted for little of the gap observed at the time of its passage. Copyright © 2005 John Wiley & Sons, Ltd.     

Strategic and Business Planning Practices of Fast Growth Family Firms

Fast-growth family firms were surveyed about their business and strategic planning practices. Of the 65 fast-growth family firms surveyed, the majority prepare written formal plans. The business plans are in sufficient detail to enable the business to tie planning to actual performance and to adjust management compensation accordingly. The majority of the firms regularly share information with employees regarding comparisons between actual company performance results and goals or planned performance. Further, the majority of the firms describe their business strategy as a high quality producer strategy rather than as a low-cost or time-based strategy. Further, when bringing new products to market, these fast-growth family firms adopt a first mover or early follower strategy. Implications of these findings for growth-oriented family firms are presented.     

Maternity rights and mothers' return to work

This paper uses a cohort of 12,000 births to examine the effect of maternity rights on mothers' post-birth return to employment decisions. It uses a discrete hazard model to disentangle the effects of the terms of maternity rights entitlements from other factors that influence the timing of a mother's return to work. Mothers with rights have an underlying (but unobserved) stronger attachment to the labour market that prompts earlier return than on average. We take this into account by estimating a counterfactual distribution of return times using a sample of women who failed to qualify for maternity rights but who have similar levels of labour market attachment. Even when differential attachment is taken into account there remains a substantial impact of maternity rights on behaviour.