Advice and dissent: rating the corporate governance compact

The July-August 1991 HBR presented "A New Compact for Owners and Directors," a set of principles for reconciling differences between owners and managers. In "Advice and Dissent: Rating the Corporate Governance Compact," a panel of three experts evaluates the Compact--and takes issue with its fundamental recommendation. Clifton R. Wharton, Jr., chairman and CEO of TIAA-CREF, describes how his organization brings delinquent managers and directors to task. Harvard Business School professor Jay W. Lorsch explains why strengthening the role of outside directors will develop more effective corporate control. And Lord Hanson, chairman of Hanson PLC, reaffirms the importance of maintaining a unitary board of directors and maximizing shareholder value.     

Survivor bias and mutual fund performance

Mutual fund attrition can create problems for a researcher becausefunds that disappear tend to do so due to poor performance.In this article we estimate the size of the bias by trackingall funds that existed at the end of 1976. When a fund mergeswe calculate the return, taking into account the merger terms.This allows a precise estimate of survivorship bias. In addition,we examine characteristics of both mutual funds that mergerand their partner funds. Estimates of survivorship bias overdifferent horizons and using different models to evaluate performanceare provided.     

Volatility in the foreign currency futures market

We examine the volatility implications of around-the-clock foreignexchange trading with transaction data on futures contractsfrom the Chicago Mercantile Exchange and the London InternationalFinancial Futures Exchange. We find higher U.S.-European andU.S.-Japanese exchange-rate volatilities during U.S. tradinghours and higher European cross-rate volatilities during Europeantrading hours. While the disclosure of private information throughtrading may partly explain these volatility patterns, we concludethat the increased volatility is more likely driven by macroeconomicnews announcements. An analysis of inter- and intraday dataalso reveals that volatility increases at times that coincidewith the release of U.S. macroeconomic news.     

Is it godly to waste food? How understanding consumers' religion can help reduce consumer food waste

Food waste is a problem worldwide, but solutions have yet to adequately incorporate consumers' core values—values which are often rooted in religion. Study 1 shows that restrictive religious norms (e.g., rules about food consumption, fasting) lead to greater food waste, whereas supportive religious norms (e.g., sharing food) lead to reduced food waste. Study 2 replicates prior findings and rules out competing explanations. Study 3 manipulates marketing messaging to show that consumers with higher (lower) levels of religiosity are more likely to reduce food waste with a prevention (promotion) framed message partnered with environmental reasoning or a promotion (prevention) framed message partnered with people-based reasoning. Implications for marketers, consumer advocacy groups, and policy makers desiring to reduce food waste are provided.     

Emotional intelligence,job satisfaction,well‐being and engagement: explaining organisational commitment and turnover intentions in policing

This study examines the effect of emotional intelligence upon the job satisfaction, well‐being and engagement of police officers in explaining their organisational commitment and turnover intentions. Survey responses from 193 police officers in Australia were analysed using partial least squares path modelling. As predicted, emotional intelligence leads to job satisfaction and well‐being, with positive path relationships leading to employee engagement and organisational commitment, thereby affecting turnover intentions. Organisational commitment was found to partially mediate the causal relationship between employee engagement and turnover intentions. The findings of this research have important theoretical and practical implications for police officer retention.     

Predictable risk and returns in emerging markets

The emergence of new equity markets in Europe, Latin America,Asia, the Mideast and Africa provides a new menu of opportunitiesfor investors. These markets exhibit high expected returns aswell as high volatility. Importantly, the low correlations withdeveloped countries' equity markets significantly reduces theunconditional portfolio risk of a world investor. However, standardglobal asset pricing models, which assume complete integrationof capital markets, fail to explain the cross section of averagereturns in emerging countries. An analysis of the predictabilityof the returns reveals that emerging market returns are morelikely than developed countries to be influenced by local information.