Invisible ties : implicit contracting and its implications for the agency relationship in corporate governance research

Research that applies agency theory to boards of directors suffers from being quite narrow as it does not recognize the true legal relationships between directors, managers and shareholders. Instead, the board of directors is best conceptualized as the principal, management as agents and stockholders’ relationships as a mix of legal and implicit contracts. We propose a recast agency relationship and develop a contingency approach that proposes (1) how a corporation’s goals vary with a board’s implicit contracting and (2) a reconceptualization of the agency problem facing boards.

Role of the N-terminal region in G protein-coupled receptor functions : negative modulation revealed by 5-HT2B receptor polymorphisms

The putative role of the N-terminal region of rhodopsin-like 7 transmembrane biogenic amine receptors in agonist-induced signaling has not yet been clarified despite recent advances in 7 transmembrane receptor structural biology. Given the existence of N-terminal nonsynonymous polymorphisms (R6G;E42G) within the HTR2B gene in a drug-abusing population, we assessed whether these polymorphisms affect 5-hydroxytryptamine 2B (5-HT2B) receptor in vitro pharmacologic and coupling properties in transfected COS-7 cells. Modification of the 5-HT2B receptor N terminus by the R6G;E42G polymorphisms increases such agonist signaling pathways as inositol phosphate accumulation as assessed by either classic or operational models. The N-terminal R6G;E42G mutations of the 5-HT2B receptor also increase cell proliferation and slow its desensitization kinetics compared with the wild-type receptor, further supporting a role for the N terminus in transduction efficacy. Furthermore, by coexpressing a tethered wild-type 5-HT2B receptor N terminus with a 5-HT2B receptor bearing a N-terminal deletion, we were able to restore original coupling. This reversion to normal activity of a truncated 5-HT2B receptor by coexpression of the membrane-tethered wild-type 5-HT2B receptor N terminus was not observed using a membrane-tethered 5-HT2B receptor R6G;E42G N terminus. These data suggest that the N terminus exerts a negative control over basal as well as agonist-stimulated receptor activity that is lost in the R6G;E42G mutant. Our findings reveal a new and unanticipated role of the 5-HT2B receptor N terminus as a negative modulator, affecting both constitutive and agonist-stimulated activity. Moreover, our data caution against excluding the N terminus and extracellular loops in structural studies of this 7 transmembrane receptor family

Contracting for infrastructure projects as credence goods

Large infrastructure projects are a major responsibility of urban and regional governments, who usually lack expertise to fully specify the demanded projects. Contractors, typically experts on such projects due to experience with similar projects,advise of the needed design as well as the cost of construction in their bids. Producing the right design is costly. We model such infrastructure projects taking into account their credence goods feature and the costly design effort they require and examine the performance of commonly used contracting methods. We show that when building costs are homogeneous and public information, simultaneous bidding involving shortlisting of two contractors and contingent compensation of both contractors on design efforts outperforms sequential search. If building costs are private information of the contractors and are revealed to them after design cost is sunk,sequential search may be superior to simultaneous bidding.

A frontier functions approach to optimal scales of sustainable production

This paper translates the concepts of sustainable production to three dimensions of economic, environmental and ecological sustainability to analyze optimal production scales by solving optimizing problems. Economic optimization seeks input-output combinations to maximize profits. Environmental optimization searches for input-output combinations that minimize the polluting effects of materials balance on the surrounding environment. Ecological optimization looks for input-output combinations that minimize the cumulative destruction of the entire ecosystem. Using an aggregate space, the framework illustrates that these optimal scales are often not identical because markets fail to account for all negative externalities. Profit-maximizing firms normally operate at the scales which are larger than optimal scales from the viewpoints of environmental and ecological sustainability; hence policy interventions are favoured. The framework offers a useful tool for efficiency studies and policy implication analysis. The paper provides an empirical investigation using a data set of rice farms in South Korea.

Functions and therapeutic roles of exosomes in cancer

The role of exosomes in cancer development has become the focus of much research, due to the many emerging roles possessed by exosomes. These micro-vesicles that are ubiquitously released in to the extracellular milieu, have been found to regulate immune system function, particularly in tumorigenesis, as well as conditioning future metastatic sites for the attachment and growth of tumor tissue. Through an interaction with a range of host tissue, exosomes are able to generate a pro-tumor environment that is essential for carcinogenesis. Herein, we discuss the contents of exosomes and their contribution to tumorigenesis, as well as their role in chemotherapeutic resistance and the development of novel cancer treatments and the identification of cancer biomarkers.

Critical linguistics in the early years : exploring functions of language through sophisticated picture books and process drama strategies

In this chapter we describe a critical fairytales unit taught to 4.5 to 5.5 year olds in a context of intensifying pressure to raise literacy achievement. The unit was infused with lessons on reinterpreted fairytales followed by process drama activities built around a sophisticated picture book, Beware of the Bears (MacDonald, 2004). The latter entailed a text analytic approach to critical literacy derived from systemic functional linguistics (Halliday, 1978; Halliday & Matthiessen, 2004). This approach provides a way of analysing how words and discourse are used to represent the world in a particular way and shape reader relations with the author in a particular field (Janks, 2010).

Examining the predictive value of combining the theory of planned behaviour and the volunteer functions inventory

The functions of the volunteer functions inventory were combined with the constructs of the theory of planned behaviour (i.e., attitudes, subjective norms, and perceived behavioural control) to establish whether a stronger, single explanatory model prevailed. Undertaken in the context of episodic, skilled volunteering by individuals who were retired or approaching retirement (N = 186), the research advances on prior studies which either examined the predictive capacity of each model independently or compared their explanatory value. Using hierarchical regression analysis, the functions of the volunteer functions inventory (when controlling for demographic variables) explained an additional 7.0% of variability in individuals’ willingness to volunteer over and above that accounted for by the theory of planned behaviour. Significant predictors in the final model included attitudes, subjective norms and perceived behavioural control from the theory of planned behaviour and the understanding function from the volunteer functions inventory. It is proposed that the items comprising the understanding function may represent a deeper psychological construct (e.g., self-actualisation) not accounted for by the theory of planned behaviour. The findings highlight the potential benefit of combining these two prominent models in terms of improving understanding of volunteerism and providing a single parsimonious model for raising rates of this important behaviour.

Informal interactions between audit committees and internal audit functions : exploratory evidence and directions for future research

Purpose – This paper aims to recognise the importance of informal processes within corporate governance and complement existing research in this area by investigating factors associated with the existence of informal interactions between audit committees and internal audit functions and in providing directions for future research. Design/methodology/approach – To examine the existence and drivers of informal interactions between audit committees and internal audit functions, this paper relies on a questionnaire survey of chief audit executives (CAEs) in the UK from listed and non-listed, as well as financial and non-financial, companies. While prior qualitative research suggests that informal interactions do take place, most of the evidence is based on particular organisational setting or on a very small range of interviews. The use of a questionnaire enabled the examination of the existence of internal interactions across a relatively larger number of entities. Findings – The paper finds evidence of audit committees and internal audit functions engaging in informal interactions in addition to formal pre-scheduled regular meetings. Informal interactions complement formal meetings with the audit committee and as such represent additional opportunities for the audit committees to monitor internal audit functions. Audit committees’ informal interactions are significantly and positively associated with audit committee independence, audit chair’s knowledge and experience, and internal audit quality. Originality/value – The results demonstrate the importance of the background of the audit committee chair for the effectiveness of the governance process. This is possibly the first paper to examine the relationship between audit committee quality and internal audit, on the existence and driver of informal interactions. Policy makers should recognize that in addition to formal mechanisms, informal processes, such as communication outside of formal pre-scheduled meetings, play a significant role in corporate governance.

Building indifferentiable compression functions from the PGV compression functions

Preneel, Govaerts and Vandewalle (PGV) analysed the security of single-block-length block cipher based compression functions assuming that the underlying block cipher has no weaknesses. They showed that 12 out of 64 possible compression functions are collision and (second) preimage resistant. Black, Rogaway and Shrimpton formally proved this result in the ideal cipher model. However, in the indifferentiability security framework introduced by Maurer, Renner and Holenstein, all these 12 schemes are easily differentiable from a fixed input-length random oracle (FIL-RO) even when their underlying block cipher is ideal. We address the problem of building indifferentiable compression functions from the PGV compression functions. We consider a general form of 64 PGV compression functions and replace the linear feed-forward operation in this generic PGV compression function with an ideal block cipher independent of the one used in the generic PGV construction. This modified construction is called a generic modified PGV (MPGV). We analyse indifferentiability of the generic MPGV construction in the ideal cipher model and show that 12 out of 64 MPGV compression functions in this framework are indifferentiable from a FIL-RO. To our knowledge, this is the first result showing that two independent block ciphers are sufficient to design indifferentiable single-block-length compression functions.

Structural damage detection method using frequency response functions

Structural damage detection using measured dynamic data for pattern recognition is a promising approach. These pattern recognition techniques utilize artificial neural networks and genetic algorithm to match pattern features. In this study, an artificial neural network–based damage detection method using frequency response functions is presented, which can effectively detect nonlinear damages for a given level of excitation. The main objective of this article is to present a feasible method for structural vibration–based health monitoring, which reduces the dimension of the initial frequency response function data and transforms it into new damage indices and employs artificial neural network method for detecting different levels of nonlinearity using recognized damage patterns from the proposed algorithm. Experimental data of the three-story bookshelf structure at Los Alamos National Laboratory are used to validate the proposed method. Results showed that the levels of nonlinear damages can be identified precisely by the developed artificial neural networks. Moreover, it is identified that artificial neural networks trained with summation frequency response functions give higher precise damage detection results compared to the accuracy of artificial neural networks trained with individual frequency response functions. The proposed method is therefore a promising tool for structural assessment in a real structure because it shows reliable results with experimental data for nonlinear damage detection which renders the frequency response function–based method convenient for structural health monitoring.

Cryptographic hash functions

Cryptographic hash functions are an important tool of cryptography and play a fundamental role in efficient and secure information processing. A hash function processes an arbitrary finite length input message to a fixed length output referred to as the hash value. As a security requirement, a hash value should not serve as an image for two distinct input messages and it should be difficult to find the input message from a given hash value. Secure hash functions serve data integrity, non-repudiation and authenticity of the source in conjunction with the digital signature schemes. Keyed hash functions, also called message authentication codes (MACs) serve data integrity and data origin authentication in the secret key setting. The building blocks of hash functions can be designed using block ciphers, modular arithmetic or from scratch. The design principles of the popular Merkle–Damgård construction are followed in almost all widely used standard hash functions such as MD5 and SHA-1.

The learning capability of construction organisations engaged in collaborative contracting - Literature Review [industry report]

Background Value for money (VfM) on collaborative construction projects is dependent on the learning capabilities of the organisations and people involved. Within the context of infrastructure delivery, there is little research about the impact of organisational learning capability on project value. The literature contains a multiplicity of often un-testable definitions about organisational learning abilities. This paper defines learning capability as a dynamic capability that participant organisations purposely develop to add value to collaborative projects. The paper reports on a literature review that proposes a framework that conceptualises learning capability to explore the topic. This work is the first phase of a large-scale national survey funded by the Alliancing Association of Australasia and the Australian Research Council. Methodology Desk-top review of leading journals in the areas of strategic management, strategic alliances and construction management, as well as recent government documents and industry guidelines, was undertaken to synthesise, conceptualise and operationalise the concept of learning capability. The study primarily draws on the theoretical perspectives of the resource-based view of the firm (e.g. Barney 1991; Wernerfelt 1984), absorptive capacity (e.g. Cohen and Levinthal 1990; Zahra and George 2002); and dynamic capabilities (e.g. Helfat et al. 2007; Teece et al. 1997; Winter 2003). Content analysis of the literature was undertaken to identify key learning routines. Content analysis is a commonly used methodology in the social sciences area. It provides rich data through the systematic and objective review of literature (Krippendorff 2004). NVivo 9, a qualitative data analysis software package, was used to assist in this process. Findings and Future Research The review process resulted in a framework for the conceptualisation of learning capability that shows three phases of learning: (1) exploratory learning, (2) transformative learning and (3) exploitative learning. These phases combine both internal and external learning routines to influence project performance outcomes and thus VfM delivered under collaborative contracts. Sitting within these phases are eight categories of learning capability comprising knowledge articulation, identification, acquisition, dissemination, codification, internationalisation, transformation and application. The learning routines sitting within each category will be disaggregated in future research as the basis for measureable items in a large-scale survey study. The survey will examine the extent to which various learning routines influence project outcomes, as well as the relationships between them. This will involve identifying the routines that exist within organisations in the construction industry, their resourcing and rate of renewal, together with the extent of use and perceived value within the organisation. The target population is currently estimated to be around 1,000 professionals with experience in relational contracting in Australia. This future research will build on the learning capability framework to provide data that will assist construction organisations seeking to maximise VfM on construction projects.

On hash functions using checksums

We analyse the security of iterated hash functions that compute an input dependent checksum which is processed as part of the hash computation. We show that a large class of such schemes, including those using non-linear or even one-way checksum functions, is not secure against the second preimage attack of Kelsey and Schneier, the herding attack of Kelsey and Kohno and the multicollision attack of Joux. Our attacks also apply to a large class of cascaded hash functions. Our second preimage attacks on the cascaded hash functions improve the results of Joux presented at Crypto’04. We also apply our attacks to the MD2 and GOST hash functions. Our second preimage attacks on the MD2 and GOST hash functions improve the previous best known short-cut second preimage attacks on these hash functions by factors of at least 226 and 254, respectively. Our herding and multicollision attacks on the hash functions based on generic checksum functions (e.g., one-way) are a special case of the attacks on the cascaded iterated hash functions previously analysed by Dunkelman and Preneel and are not better than their attacks. On hash functions with easily invertible checksums, our multicollision and herding attacks (if the hash value is short as in MD2) are more efficient than those of Dunkelman and Preneel.

On the Collision and Preimage Resistance of Certain Two-Call Hash Functions

In this paper we present concrete collision and preimage attacks on a large class of compression function constructions making two calls to the underlying ideal primitives. The complexity of the collision attack is above the theoretical lower bound for constructions of this type, but below the birthday complexity; the complexity of the preimage attack, however, is equal to the theoretical lower bound. We also present undesirable properties of some of Stam’s compression functions proposed at CRYPTO ’08. We show that when one of the n-bit to n-bit components of the proposed 2n-bit to n-bit compression function is replaced by a fixed-key cipher in the Davies-Meyer mode, the complexity of finding a preimage would be 2 n/3. We also show that the complexity of finding a collision in a variant of the 3n-bits to 2n-bits scheme with its output truncated to 3n/2 bits is 2 n/2. The complexity of our preimage attack on this hash function is about 2 n . Finally, we present a collision attack on a variant of the proposed m + s-bit to s-bit scheme, truncated to s − 1 bits, with a complexity of O(1). However, none of our results compromise Stam’s security claims.