How does ownership structure invfluence bank risk? Analyzing the role of managerial incentives

This paper analyzes how ownership concentration and managerial incentives influences bank risk for a large sample of US banks over the period 1997-2007. Using 2SLS simultaneous equations models, we show that ownership concentration has a positive total effect on bank risk. This is the result of a positive direct effect, which reflects monitoring and opportunistic behavior, and a negative indirect effect, which works through the design of managerial incentive contracts and reflects shareholder preferences toward risk. Large shareholders reduce bank risk by reducing the sensitivity of CEO wealth to stock volatility (Vega) and by increasing the CEO pay-performance sensitivity (Delta). In addition, we show that the direct and indirect effect of ownership concentration on bank risk depends on the type of the largest shareholder (a family, a bank, a corporation or an institutional investor), as well as, on the total shareholding held by each type as a group. Our results suggest that the positive relation between ownership concentration and risk is not the result of preferences towards more risk. Rather, they point at opportunistic behavior of large shareholders.

The Strategic Impact of Clinical Practice Guidelines in Nursing on the Managerial Function of Supervision

Clinical practice guidelines in nursing (CPG-N) are tools that allow the necessary knowledge that frequently remains specialist-internalised to be made explicit. These tools are a complement to risk adjustment systems (RAS), reinforcing their effectiveness and permitting a rationalisation of healthcare costs. This theoretical study defends the importance of building and using CPG-Ns as instruments to support the figure of the nursing supervisor in order to optimise the implementation of R&D and hospital quality strategies, enabling clinical excellence in nursing processes and cost-efficient reallocation of economic resources through their linear integration with SARs.

Stakeholder Activism, Managerial Entrenchment, and the Congruence of Interests between Shareholders and Stakeholders

We argue that when stakeholder protection is left to the voluntary initiative of managers, concessions to social activists and pressure groups can turn into a self-entrenchment strategy for incumbent CEOs. Stakeholders other than shareholders thus benefit from corporate governance rules putting managers under a tough replacement threat. We show that a minimal amount of formal stakeholder protection, or the introduction of explicit covenants protecting stakeholder rights in the firm charter, may deprive CEOs of the alliance with powerful social activists, thus increasing managerial turnover and shareholder value. These results rationalize a recent trend whereby well-known social activists like Friends of the Earth and active shareholders like CalPERS are showing a growing support for each other s agendas.

Managerial nursing competencies in the expansion of the Family Health Strategy

Abstract OBJECTIVE To relate the managerial competencies required of nurses with the process of change experienced in the expansion of the Family Health Strategy (FHS). METHOD A qualitative research conducted in primary health care in a southern Brazilian city, through interviews with 32 managerial and clinical nurses. The interviews were processed by IRAMUTEQ software. The resulting classes were examined under five managerial competencies to promote change. RESULTS The four classes obtained from data were: the Family Health Strategy expansion process; confrontations and potentialities; mobilization for the change; innovations in medical and nursing consultations. The classes were related to one or more competencies. CONCLUSION The expansion of the Family Health Strategy requires managerial competencies of implementing and sustaining change, negotiating agreements and commitments, using power and influence ethically and effectively, sponsoring and selling new ideas, and encouraging and promoting innovation.

The effects of poor financial information systems on the long term sustainability of local public services. Empirical evidence from the Catalan Municipalities

In this paper we describe the existence of financial illusion in public accountingand we comment on its effects for the future sustainability of local publicservices. We relate these features to the lack of incentives amongst publicmanagers for improving the financial reporting and thus management of publicassets. Financial illusion pays off for politicians and managers since it allowsfor larger public expenditure increases and managerial slack, these beingarguments in their utility functions. This preference is strengthen by the shorttime perspective of politically appointed public managers. Both factors runagainst public accountability. This hypothesis is tested for Spain by using anunique sample. We take data from around forty Catalan local authorities withpopulation above 20,000 for the financial years 1993-98. We build this databasis from the Catalan Auditing Office Reports in a way that it can be linkedto some other local social and economic variables in order to test ourassumptions. The results confirm that there is a statistical relationship between the financialillusion index (FI as constructed in the paper) and higher current expenditure.This reflects on important overruns and increases of the delay in payingsuppliers, as well as on a higher difficulties to face capital finance. Mechanismsfor FI creation have to do among other factors, with delays in paying suppliers(and thereafter higher future financial costs per unit of service), no adequateprovision for bad debts and lack of appropriate capital funding either forreposition or for new equipments. For this, it is crucial to monitor the way inwhich capital transfers are accounted in local public sheet balances. As a result,for most of the Municipalities we analyse, the funds for guaranteeing continuityand sustainability of public services provision are today at risk.Given managerial incentives at present in public institutions, we conclude thatpublic regulation recently enforced for assuring better information systems inlocal public management may not be enough to change the current state of affairs.

Are Voting Advice Applications (VVAs) more than Toys ? : First findings on Impact and Accountability of VAAs

To what extent do Voting Advice Applications (VAA) have an influence on voting behaviour and to what extent should providers be hold accountable for such tools? This paper puts forward some empirical evidence from the Swiss VAA smartvote. The enormous popularity of smartvote in the last national elections in 2007 and the feedback of users and candidates let us come to the conclusion that smartvote is more than a toy and likely to have an influence on the voting decisions. Since Swiss citizens not only vote for parties but also for candidates, and the voting recommendation of smartvote is based on the political positions of the candidates, smartvote turns out to be particularly helpful. Political scientists must not keep their hands off such tools. Scientific research is needed to understand their functioning and possibilities to manipulate elections. On the bases of a legal study we come to the conclusion, that a science driven way of setting up such tools is essential for their legitimacy. However, we do not believe that there is a single best way of setting up such a tool and rather support a market like solution with different competing tools, provided they meet minimal standards like transparency and equal access for all parties and candidates. Once the process of selecting candidates and parties are directly linked to the act of voting, all these questions will become even more salient.

Managerial incentives for mergers

We study managerial incentives in a model where managers take notonly product market but also takeover decisions. We show that the optimalcontract includes an incentive to increase the firm's sales, under bothquantity and price competition. This result is in contrast to the previousliterature and hinges on the fact that with a more aggressive manager rivalfirms earn lower profits and are willing to sell out at a lower price. \\However, as a side--effect of such a contract, the manager might take overmore rivals than would be profitable.

Ética na Administração Pública em Cabo Verde. O Papel do Tribunail de Contas de Cabo Verde como Autarquia do Estado para Accountability

Actualmente, na nossa sociedade apresenta desafios, está continuamente em busca de padrões éticos para uma melhoria da sociedade, é um padrão de grande importância para crescimento e desenvolvimento da Administração Publica cabo-verdiana (APCV). A gestão da coisa Pública é um dos fundamentos de” boa governação”. De acordo com os dados da pesquisa, a ética na APCV é um dos padrões que pouco se poem em pratica. Neste sentido o presente trabalho visa analisar” Ética na Administração Publica”, tendo como estudo de caso o Tribunal de Contas de Cabo Verde (TCCV). Para alcançar o objectivo deste trabalho, fez-se uma pesquisa bibliográfica sobre a ética na Administração Publica e sobre teorias relacionadas com a ética nas organizações. Utilizou-se o método inquisitivo baseado em questionários com perguntas abertas e fechadas para obter as percepçoes dos dirigentes públicos. O tratamento de dados foi feito recorrendo o Software SPSS versão 17 e Excel. Portanto na realização deste estudo foi utilizado o modelo American Psychological Association (APA) no que refere as citações e referências bibliográficas. Os resultados do estudo demonstraram que a ética é um dos instrumentos de extrema relevância para gestão da coisa pública.

Does privatising public service provision reduce accountability?

This paper studies how privatising service provision (shifting control rights and contractualobligations to providers) affects accountability. There are two main effects. (1) Privatisation demotivates governments from investigating and responding to public demands, since providers then hold up service adaptations. (2) Privatisation demotivates the public from mobilising to pressure for service adaptations, since providers then indirectly holdup the public by inflating the government s cost of implementing these adaptations. So, when choosing governance mode, politicians may be biased towards privatising as a way to escape public attention; relatedly, privatising utilities may reduce public pressure and increase consumer prices.

Is confidence in decisions related to feedback? Evidence-and lack of evidence-from random samples of real-world managerial behavior?

Confidence in decision making is an important dimension of managerialbehavior. However, what is the relation between confidence, on the onehand, and the fact of receiving or expecting to receive feedback ondecisions taken, on the other hand? To explore this and related issuesin the context of everyday decision making, use was made of the ESM(Experience Sampling Method) to sample decisions taken by undergraduatesand business executives. For several days, participants received 4 or 5SMS messages daily (on their mobile telephones) at random moments at whichpoint they completed brief questionnaires about their current decisionmaking activities. Issues considered here include differences between thetypes of decisions faced by the two groups, their structure, feedback(received and expected), and confidence in decisions taken as well as inthe validity of feedback. No relation was found between confidence indecisions and whether participants received or expected to receivefeedback on those decisions. In addition, although participants areclearly aware that feedback can provide both confirming and disconfirming evidence, their ability to specify appropriatefeedback is imperfect. Finally, difficulties experienced inusing the ESM are discussed as are possibilities for further researchusing this methodology.

Corporate criminal law and organization incentives: A managerial perspective

Corporate criminal liability puts a serious challenge to the economictheory of enforcement. Are corporate crimes different from other crimes?Are these crimes best deterred by punishing individuals, punishing corporations, or both? What is optimal structure of sanctions? Shouldcorporate liability be criminal or civil? This paper has two majorcontributions to the literature. First, it provides a common analyticalframework to most results presented and largely discussed in the field.In second place, by making use of the framework, we provide new insightsinto how corporations should be punished for the offenses committed bytheir employees.