Independent Directors and Corporate Governance

The paper examines the reliance placed in the United Kingdom and Australia on the concept of ‘independent directors’ as a mechanism to ensure better (less crisis prone) corporate governance. The article suggests that there is an over emphasis placed on some rather limited psychological evidence that independence in the boardroom produces more critical thinking and informed discussion thus leading to higher quality decision-making. The article offers others evidence, drawn from the material on the psychology of group formation and group discussion, which suggests that this confidence in ‘independence’ is misplaced. The article exposes a misunderstanding between independence as a character trait and independence as a structural concern which goes to the heart of the corporate governance discourse around the benefits of independence.

The Bonds of Brotherhood: New Evidence of Sino-North Korean Exchanges, 1950-1954

Drawing on recently declassified documents from the archive of the Foreign Ministry of the People’s Republic of China (PRC), this article looks at China’s relationship with North Korea during and immediately after the Korean War. Although previous scholarship has touched on PRC–North Korean military ties during the war, this article is the first in-depth analysis of issues that are less well understood, notably China’s efforts to cope with a huge influx of refugees from North Korea, the PRC’s economic assistance during the war and in the early postwar reconstruction, and Chinese educational and ideological support for North Korean professionals and party cadres. The article shows that the extensive military coordination between Beijing and Pyongyang was only one way in which the war brought North Korea and the PRC into a closer relationship

Force-induced activation of covalent bonds in mechanoresponsive polymeric materials

Mechanochemical transduction enables an extraordinary range of physiological processes such as the sense of touch, hearing, balance, muscle contraction, and the growth and remodelling of tissue and
bone1–6. Although biology is replete with materials systems that actively and functionally respond to mechanical stimuli, the default mechanochemical reaction of bulk polymers to large external stress is the unselective scission of covalent bonds, resulting in damage or failure7. An alternative to this degradation process is the rational molecular design of synthetic materials such that mechanical stress
favourably altersmaterial properties. A few mechanosensitive polymers with this property have been developed8–14; but their active response is mediated through non-covalent processes, which may
limit the extent to which properties can be modified and the longterm stability in structural materials. Previously, we have shown with dissolved polymer strands incorporating mechanically sensitive chemical groups—so-called mechanophores—that the directional nature of mechanical forces can selectively break and re-form covalent bonds15,16. We now demonstrate that such forceinduced covalent-bond activation can also be realized with mechanophore-linked elastomeric and glassy polymers, by using a mechanophore that changes colour as it undergoes a reversible electrocyclic ring-opening reaction under tensile stress and thus allows us to directly and locally visualize the mechanochemical reaction. We find that pronounced changes in colour and fluorescence emerge with the accumulation of plastic deformation, indicating that in these polymeric materials the transduction of mechanical force into the ring-opening reaction is an activated process. We anticipate that force activation of covalent bonds can serve as a general strategy for the development of new mechanophore building blocks that impart polymeric materials with desirable functionalities ranging from damage sensing to fully regenerative self-healing.

The failure of generalized gradient approximations (GGAs) and meta-GGAs for the two-center three-electron bonds in He-2(+), (H2O)(2)(+), and (NH3)(2)(+)

The radical cations He-2(+) (H2O)(2)(+), and (NH3)(2)(+) with two-center three-electron A-A bonds are investigated at the configuration interaction (CI), accurate Kohn-Sham (KS), generalized gradient approximation (GGA), and meta-GGA levels. Assessment of seven different GGA and six meta-GGA methods shows that the A(2)(+) systems remain a difficult case for density functional theory (DFT). All methods tested consistently overestimate the stability of A(2)(+): the corresponding D-e errors decrease for more diffuse valence densities in the series He-2(+) > (H2O)(2)(+) > (NH3)(2)(+). Upon comparison to the energy terms of the accurate Kohn-Sham solutions, the approximate exchange functionals are found to be responsible for the errors of GGA-type methods, which characteristically overestimate the exchange in A(2)(+). These so-called exchange functionals implicitly use localized holes. Such localized holes do occur if there is left-right correlation, i.e., the exchange functionals then also describe nondynamical correlation. However, in the hemibonded A(2)(+) systems the typical molecular (left-right, nondynamical) correlation of the two-electron pair bond is absent. The nondynamical correlation built into the exchange functionals is then spurious and yields too low energies.

Responsible Leadership: Business Myth or Corporate Reality?

The financial crisis has highlighted some of the limitations of the global system. Enterprises previously thought to be too big to fail have learned the harsh realities of capitalism (Merill Lynch, Lehman Bros, Northern Rock), countries have been shaken considerably from the bankruptcy of Iceland to the near-collapse of the markets in Greece, Ireland and Italy. The current age of austerity has largely dominated supra-national and indeed global politics in the last few years. The extent of the crisis has illustrated that relationships between business, governments and society needs to be re-evaluated in light of shifts in the global market thereby recognizing that some countries have a more limited power of persuasion than some corporations.

Corporate Governance as a School of Social Reform

In this paper, I present a vision of the corporation as a moral person. I point to “the separation of ownership and control” as a moment when the corporation broke away from the moral lives of ownermanagers. I then draw out the manner in which we can speak of the company as a moral person. Finally, through a discussion of social reporting in two British banks, I point to a shift in how this moral personhood is articulated, with the rise of corporate governance—or doing business well—as its own foundation of corporate responsibility. I propose a view of corporate responsibility as a “transmission mechanism” for the company’s role in moral life, situated in the broader social conception of “moral economy.” This viewpoint sets out landscapes of legitimation and justification through which the ties that underpin economic life are founded

Corporate Governance in Canadian and US Credit Unions

This report, a collaborative effort between the Filene Research Institute and the Credit Union Central of Canada, with participation from the Desjardins Group, follows on two recent governance projects: Tracking the Relationship Between Credit Union Governance and Performance and a three-part series by Professor Robert Hoel about how boards can add more value. Beyond these, the academic literature of corporate governance is well developed, so this study includes an in-depth review of financial institution governance research and calls out the differences between credit unions and other firms. Also, because surveys can only go so far in teasing out insights, the authors followed up with a dozen interviews with credit unions of all sizes across all three major North American credit union systems.

Because the report is survey-based, large swaths of the findings compare major and minor details of different (and often not-so-different) approaches to governance in the three systems and among differently sized credit unions. From those comparisons, some interesting differences emerge. For example, as a federated system, Desjardins excels at some aspects of board development and system governance in ways that the more atomized US and Canadian credit union systems do not.

Law, Politics and Financial Development: The Great Reversal of the U.K. Corporate Debt Market

This article examines the role of creditor protection in the development of the U.K. corporate bond market. This market grew rapidly in the late nineteenth century, but in the twentieth century it experienced a reversal, albeit with a short-lived post-1945 renaissance. Such was the extent of the reversal that the market from the 1970s onwards was smaller than it had been in 1870. We find that law does not explain the variation in the size of this market over time. Alternatively, our evidence suggests that inflation and taxation policies were major drivers of this market in the post-1945 era. Copyright © The Economic History Association 2013