A CODE FOR CORPORATE PRACTICES AND CONDUCT: RESHAPING COMPANY BOARDS?

A set of proposals on corporate conduct, prepared under the auspices of the National Companies and Securities Commission, was widely circulated for discussion during 1990 and issued in its final form in December. The proposals constitute a self-regulatory code which may significantly influence the control and decision-making structures of listed companies, particularly through its guidelines on the composition of the board of directors. This paper concludes that there is evidence that further regulating board memberships could impose costs on shareholders of companies which favour certain board structures.     

CHANGES IN WATER ALLOCATION MECHANISMS FOR CALIFORNIA AGRICULTURE

Existing institutions allocating water in California reflect prior appropriation water rights established when water was abundant. These allocation rules queue users and do not encourage water conservation. Increased water scarcity and growing valuation of water's environmental benefits are inducing a transition to water allocation mechanisms that increase water efficiency in agriculture. Transferable rights systems will lead to market-like water allocation, induce farmers to adopt water conservation technology, and may not face strong objection from senior water rights holders. One must weigh the efficiency gains associated with transition from water rights to water markets against the transaction costs associated with installing facilities that enable water exchange and trading .
Transition to water markets may preserve the agricultural sector's well-being while allowing the transfer of some water outside of agriculture—in particular, for environmental benefit. The cost of policies proposed to reduce agricultural water supply while encouraging water trading are inversely related to the extent of trading allowed. The more farmers trade water, the less costly reducing water supply is to agriculture. Policies reducing water supply to Central Valley Project contractors and allowing trading only among these contractors are much more expensive than are policies encouraging trading among all agricultural water users in California .