Accounting for Human Rights Violations Risk: Conflict Minerals Mandatory Disclosures under the Dodd Frank Act

This paper examines the equity market response to firms’ disclosure of human rights violation risk with regard to conflict mineral usage as required by Section 1502 of the Dodd-Frank Act (the Act). This paper assesses the aggregate equity market response to regulatory events leading to the passage of the Act, the equity market reaction to voluntary early disclosures and mandatory disclosures of conflict mineral information in Form SD, as well as the determinants of the equity market response. Using a sample of 4,399 US registrants from January 1, 2008 to September 30, 2014, we document a significant negative stock market reaction to the passage of the Act and to conflict minerals disclosures on Form SD. The equity market reaction is more negative and limited to companies that source their minerals from conflict zones, companies with human rights violations, and companies with ambiguous disclosures. Taken together, the results of this study provide an economic justification for companies with poor conflict minerals practices to improve in order to avoid high costs that will arise if firms are forced to disclose human rights abuses. This paper also provides preliminary evidence that Form SD is successful in reducing the governance gap that exposes investors to unnecessary sanction, litigation and reputation risk from firms’ activities in conflict minerals usage.

Blocking Top-down awareness of Kanizsa Figures: An ERP Investigation into Bottom-up Processing of Illusory Contours

Neural models of the processing of illusory contour (ICs) diverge from one another in terms of their emphasis on bottom-up versus top-down constituents. The current study uses a dichoptic fusion paradigm to block top-down awareness of ICs in order to examine possible bottom-up effects. Group results indicate that the N170 ERP component is particularly sensitive to ICs at central occipital sites when top-down awareness of the stimulus is permitted. Furthermore, single-subject statistics reveal that the IC N170 ERP effect is highly variable across individuals in terms of timing and topographical spread. The results suggest that the ubiquitous N170 effect to ICs found in the literature depends, at least in part, on participants’ awareness of the stimulus. Therefore a strong bottom-up model of IC processing at the time of the N170 is unlikely.

Empathy and Emotion Processing in Mild Head Injury and Sub-clinical Psychopathy

The current study sought to investigate the nature of empathic responding and emotion processing in persons who have experienced Mild Head Injury (MHI) and how this relationship between empathetic responding and head injury status may differ in those with higher psychopathic characteristics (i.e., subclinical psychopathy). One-hundred university students (36% reporting having a previous MHI) completed an Emotional Processing Task (EPT) using images of neutral and negative valence (IAPS, 2008) designed to evoke empathy; physiological responses were recorded. Additionally, participants completed measures of cognitive competence and various individual differences (empathy - QCAE; Reniers, 2011; Psychopathy - SRP-III, Williams, Paulhus & Hare, 2007) and demographics questionnaires. MHI was found to be associated with lower affective empathy and physiological reactivity (pulse rate) while viewing images irrespective of valence, reflecting a pattern of generalized underarousal. The empathic deficits observed correlated with the individual’s severity of injury such that the greater number of injury characteristics and symptoms endorsed by a subject, the more dampened the affective and cognitive empathy reactions to stimuli and the lower his/her physiological reactivity. Importantly, psychopathy interacted with head injury status such that the effects of psychopathy were significant only for individuals indicating a MHI. This group, i.e., MHI subjects who scored higher on psychopathy, displayed the greatest compromise in empathic responding. Interestingly, the Callous Affect component of psychopathy was found to account for the empathic and emotion processing deficits observed for individuals who report a MHI; in contrast, the Interpersonal Manipulation component emerged as a better predictor of empathic and emotion deficits observed in the No MHI group. These different patterns may indicate the involvement of different underlying processes in the manifestation of empathic deficits associated with head injury or subclinical psychopathy. It also highlights the importance of assessing for prior head injury in populations with higher psychopathic characteristics due to the possible combined/enhanced influences. The results of this study have important social implications for persons who have experienced a concussion or limited neural trauma since even subtle injury to the head may be sufficient to produce dampened emotion processing, thereby impacting one’s social interactions and engagement (i.e., at risk for social isolation or altered interpersonal success). Individuals who experience MHI in conjunction with certain personality profiles (e.g., higher psychopathic characteristics) may be particularly at risk for being less capable of empathic compassion and socially-acceptable pragmatics and, as a result, may not be responsive to another person’s emotional well-being.