Visible Minorities in the Multi-Racial State: When are Preferential Policies Justifiable?

This article outlines the circumstances in which the state is justified in implementing preferential policies in favour of visible minorities and describes an approach to policy formulation. The thesis is that visible minorities warrant preferential treatment in order to rectify past injustices and to redistribute advantages to visible minorities who are chronically poor. Supply-side over demand-side policies are favoured. Supply-side policies are preferable because they support substantive equality by ensuring that individuals have a minimum level of subsistence. If the goal of achieving substantive equality is to be achieved, the poor should also be entitled to benefit under preferential policies. Thus, preferential policies should targetpoorpeople generally and visible minorities specifically

Voluntary Adoption of Corporate Governance Mechanisms

We model firms' incentives to voluntarily adopt corporate governance mechanisms and hypothesize that management's ability to extract private benefits, the need for external funds, and the ease with which a firm's assets may be monitored are important determinants of the level of governance. Using hand-collected data, we test these hypotheses and examine firms' propensity to adopt recommended but not required governance standards from their home and neighboring country's jurisdictions. We document that a significant level of voluntary adoption occurs and that this level has been both increasing over time and declining in variability across firms. Governance mechanisms are least likely to be voluntarily implemented when management controls a significant portion of common stock votes or a majority owner exists. In contrast, voluntary adoption increases when the firm faces significant investment opportunities and employs large levels of expenditures which are difficult to monitor such as research and development expenses.Corporate Governance, Empirial Finance

Investigating subsumption in DL-based terminologies: A case study in SNOMED CT

Formalisms such as description logics (DL) are sometimes expected to help terminologies ensure compliance with sound ontological principles. The objective of this paper is to study the degree to which one DL-based biomedical terminology (SNOMED CT) complies with such principles. We defined seven ontological principles (for example: each class must have at least one parent, each class must differ from its parent) and examined the properties of SNOMED CT classes with respect to these principles. Our major results are: 31% of the classes have a single child; 27% have multiple parents; 51% do not exhibit any differentiae between the description of the parent and that of the child. The applications of this study to quality assurance for ontologies are discussed and suggestions are made for dealing with multiple inheritance

Regulating Systemic Risk in Canada

This chapter is a contribution to an interdisciplinary book that drew on some of the world\u27s leading experts on financial stability and regulation to examine and critique the progress made since 2008 in addressing systemic risk. The chapter contends that Canadian regulators’ ability to address systemic risk is limited by the structure of the regime, built on a sector-by-sector model, without any one institution responsible for comprehensively regulating the financial system. We also posit the proposal to establish a macroprudential regulator to monitor the financial system as a whole, as advocated by academic literature and international forums, is unlikely to gain momentum in Canada, given the reality of path dependency in regulatory policy making. Instead, we argue for a collaborative approach toward more effective management of systemic risk. This goal can be achieved by establishing financial stability as an overriding priority for inter-agency regulatory groups. These bodies should extend their membership to include all key federal and provincial regulators and establish a robust working plan for monitoring system-wide vulnerabilities, which would ensure timely attention and action on problems by competent authorities

Weather, Leather, and the Obligation to Disclose: Kerr v. Danier Leather Inc.

Is an issuer legally obliged to update its prospectus if a material event occurs following the receipt for the prospectus but prior to the closing of the offering? This is the crucial issue that is addressed in Kerr v. Danier Leather Inc., a case that has been heard at the trial and appeal levels in Ontario and that will be heard in 2007 by the Supreme Court of Canada. In this commentary, we argue that the Court of Appeal decision in the case overlooked crucial aspects of contemporary securities law and policy in holding that there is no obligation to disclose intra-quarterly results that cast doubt on the achievement of an earnings forecast in a prospectus. Further, although the Court of Appeal took into account the business judgment rule, there is no precedent for applying it in the context of an obligation to fulfill statutory disclosure requirements. Ultimately, this is a case in which courts squarely confront the balance between legal obligations imposed on issuers and the expectations of investors in the context of forward-looking information. This issue was not a feature of the disclosure landscape when the Ontario statute was originally enacted and, until this case, had not been litigated in this country. In Part II of this commentary, we explore the difference between material fact and material change and the meaning of section 57(1) of the Securities Act We also examine the policy rationales underpinning section 57(1) and section 130(1); we argue that if one reads these two sections together, changes in material facts as well as material changes must be disclosed if they arise following the issuance of a receipt for the prospectus but prior to the end of the distribution period. The notion of investor protection embedded in the Securities Act is severely undermined if investors are not provided -with information that they would consider to be material regardless of whether the information is technically speaking a material fact or a material change. In Part III, we turn to examine the business judgment rule: its history and development in Canada. We argue that the business judgment rule is inapplicable in a case such as Danier, which deals with the obligations under securities law to disclose material facts and material changes. We conclude the commentary in Part IV

Private Regulation of Insider Trading in the Shadow of Lax Public Enforcement: Evidence from Canadian Firms

Like firms in the United States, many Canadian firms voluntarily restrict trading by corporate insiders beyond the requirements of insider trading laws (i.e., super-compliance). Thus, we aim to understand the determinants of firms’ private insider trading policies (ITPs), which are quasi-contractual devices. Based on the assumption that firms that face greater costs from insider trading (or greater benefits from restricting insider trading) ought to be more inclined than other firms to adopt more stringent ITPs, we develop several testable hypotheses. We test our hypotheses using data from a sample of firms included in the Toronto Stock Exchange/Standard and Poor’s (TSX/S&P) Index. Our empirical results suggest that Canadian firms do not randomly restrict insider trading, but rather do so predictably and with a predictable level of intensity, suggesting that some firms wish to control insider trading to enhance corporate performance. Our most robust finding is that firms with a greater prevalence of controlling shareholders are more likely to have adopted a super-compliant ITP than firms with fewer such shareholders, implying that influential shareholders may oppose insider trading and challenging the claim that private restrictions of insider trading would not arise in the absence of insider trading laws

Private Regulation of Insider Trading in The Shadow of Lax Public Enforcement (and a Strong Neighbor): Evidence from Canadian Firms

Few studies have examined firms’ voluntary self-regulation of insider trading. In this article, we investigate the characteristics of Canadian firms that voluntarily adopt policies restricting trading by their insiders when they are already subject to insider trading laws. We hypothesize that certain firm-specific characteristics -- such as larger size, higher market-to-book ratio, greater firm-specific uncertainty, the presence of controlling shareholders, and cross-listing into the United States where insider trading laws are more vigorously enforced -- are positively related to a firm\u27s propensity to adopt an insider trading policy (ITP), because insider trading is likely to be more costly for firms with these characteristics. We test these hypotheses using data on Canadian firms included in the Toronto Stock Exchange/Standard and Poor’s (TSX/S&P) Index. Using an ordered probit analysis, we find that larger firms, firms that have more than one controlling shareholder, firms with greater firm-specific uncertainty, and firms that are cross-listed in the United States, where public enforcement of insider trading laws is more frequent and severe than in Canada, tend to have ITPs that are stricter than required by Canadian insider trading law (i.e., super-compliant ITPs). Our results suggest that firms do not randomly restrict insider trading, but rather do so predictably and with a predictable level of intensity. They thus challenge the claim that firms are merely window dressing by adopting ITPs. Our results also illustrate the strong extra-territorial effects of U.S. securities laws and enforcement on Canadian firms. In addition, they suggest that formal organizational rules may dominate private sanctions in this context, consistent with norms/trust theories of organizational rules rather than economic deterrence theories of such rules. On net, our empirical results support the case made by those who see insider trading as economically harmful to firms

Monitoring to Reduce Agency Costs: Examining the Behavior of Independent and Non-Independent Boards

Berle and Means’s analysis of the corporation—in particular, their view that those in control are not the owners of the corporation—raises questions about actions that corporations take to counter concerns regarding management’s influence. What mechanisms, if any, do corporations implement to balance the distribution of power in the corporation? To address this question, we analyze boards of directors’ propensity to voluntarily adopt recommended corporate governance practices. Because board independence is one way to enhance shareholders’ ability to monitor management, we probe whether firms with independent boards of directors (which we define as boards with either an independent chair or a majority of independent directors) are more likely than firms without independent boards to adopt these practices. We focus on boards’ willingness to monitor their firms’ agents, examining the relationship between board independence and the voluntary adoption of corporate governance guidelines

Private Regulation of Insider Trading in The Shadow of Lax Public Enforcement (and a Strong Neighbor): Evidence from Canadian Firms

Few studies have examined firms’ voluntary self-regulation of insider trading. In this article, we investigate the characteristics of Canadian firms that voluntarily adopt policies restricting trading by their insiders when they are already subject to insider trading laws. We hypothesize that certain firm-specific characteristics -- such as larger size, higher market-to-book ratio, greater firm-specific uncertainty, the presence of controlling shareholders, and cross-listing into the United States where insider trading laws are more vigorously enforced -- are positively related to a firm\u27s propensity to adopt an insider trading policy (ITP), because insider trading is likely to be more costly for firms with these characteristics. We test these hypotheses using data on Canadian firms included in the Toronto Stock Exchange/Standard and Poor’s (TSX/S&P) Index. Using an ordered probit analysis, we find that larger firms, firms that have more than one controlling shareholder, firms with greater firm-specific uncertainty, and firms that are cross-listed in the United States, where public enforcement of insider trading laws is more frequent and severe than in Canada, tend to have ITPs that are stricter than required by Canadian insider trading law (i.e., super-compliant ITPs). Our results suggest that firms do not randomly restrict insider trading, but rather do so predictably and with a predictable level of intensity. They thus challenge the claim that firms are merely window dressing by adopting ITPs. Our results also illustrate the strong extra-territorial effects of U.S. securities laws and enforcement on Canadian firms. In addition, they suggest that formal organizational rules may dominate private sanctions in this context, consistent with norms/trust theories of organizational rules rather than economic deterrence theories of such rules. On net, our empirical results support the case made by those who see insider trading as economically harmful to firms