Inside-Out Corporate Governance

Until late in the twentieth century, internal corporate governance—that is, decision making by the principal constituencies of the firm—was clearly distinct from outside oversight by regulators, auditors and credit rating agencies, and markets. With the 1980s takeover wave and hedge funds’ and equity funds’ more recent involvement in corporate governance, the distinction between inside and outside governance has eroded. The tools of inside governance are now routinely employed by governance outsiders, intertwining the two traditional modes of governance. We argue in this Article that the shift has created a new governance paradigm, which we call inside-out corporate governance. Using the inside-out model as our lens, and drawing on comparisons to Italian and E.U. governance, we explore three areas of corporate governance that have been pervasively restructured by the Dodd-Frank Act and subsequent regulation: proxy access, credit rating agencies, and derivatives. We begin, in Part I, with proxy access, arguing that the new scheme for minority shareholder access excludes the very outsiders it ostensibly integrates into corporate governance. In Part II, which focuses on auditing and credit rating agencies, we argue that the inside-out relationship—in which the corporation itself chooses its gatekeeper—is deeply problematic but cannot be “cured.” The most realistic strategy is to create more flexibility in the audit relationship, and diminish the importance of credit ratings. Part III analyzes the new derivatives regulation. Here, we argue that Congress’s effort to sharply separate the inside and outside uses of derivatives is incoherent from a corporate governance perspective. We conclude by briefly speculating about the future implications of inside-out governance

Inside-Out Corporate Governance

Until late in the twentieth century, internal corporate governance—that is, decision making by the principal constituencies of the firm—was clearly distinct from outside oversight by regulators, auditors and credit rating agencies, and markets. With the 1980s takeover wave and hedge funds’ and equity funds’ more recent involvement in corporate governance, the distinction between inside and outside governance has eroded. The tools of inside governance are now routinely employed by governance outsiders, intertwining the two traditional modes of governance. We argue in this Article that the shift has created a new governance paradigm, which we call inside-out corporate governance. Using the inside-out model as our lens, and drawing on comparisons to Italian and E.U. governance, we explore three areas of corporate governance that have been pervasively restructured by the Dodd-Frank Act and subsequent regulation: proxy access, credit rating agencies, and derivatives. We begin, in Part I, with proxy access, arguing that the new scheme for minority shareholder access excludes the very outsiders it ostensibly integrates into corporate governance. In Part II, which focuses on auditing and credit rating agencies, we argue that the inside-out relationship—in which the corporation itself chooses its gatekeeper—is deeply problematic but cannot be “cured.” The most realistic strategy is to create more flexibility in the audit relationship, and diminish the importance of credit ratings. Part III analyzes the new derivatives regulation. Here, we argue that Congress’s effort to sharply separate the inside and outside uses of derivatives is incoherent from a corporate governance perspective. We conclude by briefly speculating about the future implications of inside-out governance

Signatures of the post-hydration heating of highly aqueously altered CM carbonaceous chondrites and implications for interpreting asteroid sample returns

The CM carbonaceous chondrites have all been aqueously altered, and some of them were subsequently heated in a parent body environment. Here we have sought to understand the impact of short duration heating on a highly aqueously altered CM through laboratory experiments on Allan Hills (ALH) 83100. Unheated ALH 83100 contains 83 volume per cent serpentine within the fine-grained matrix and altered chondrules. The matrix also hosts grains of calcite and dolomite, which are often intergrown with tochilinite, Fe(Ni) sulphides (pyrrhotite, pentlandite), magnetite and organic matter. Some of the magnetite formed by replacement of Fe(Ni) sulphides that were accreted from the nebula. Laboratory heating to 400 °C has caused partial dehydroxylation of serpentine and loss of isotopically light oxygen leading to an increase in bulk δ18O and fall in Δ17O. Tochilinite has decomposed to magnetite, whereas carbonates have remained unaltered. With regards to infrared spectroscopy (4000–400 cm-1; 2.5–25 µm), heating to 400 °C has resulted in decreased emissivity (increased reflectance), a sharper and more symmetric OH band at 3684 cm-1 (2.71 µm), a broadening of the Si—O stretching band together with movement of its minimum to longer wavenumbers, and a decreasing depth of the Mg—OH band (625 cm-1; 16 µm). The Si—O bending band is unmodified by mild heating. With heating to 800 °C the serpentine has fully dehydroxylated and recrystallized to ∼Fo60/70 olivine. Bulk δ18O has further increased and Δ17O decreased. Troilite and pyrrhotite have formed, and recrystallization of pentlandite has produced Fe,Ni metal. Calcite and dolomite were calcined at ∼700 °C and in their place is an un-named Ca-Fe oxysulphide. Heating changes the structural order of organic matter so that Raman spectroscopy of carbon in the 800 °C sample shows an increased (D1 + D4) proportional area parameter. The infrared spectrum of the 800 °C sample confirms the abundance of Fe-bearing olivine and is very similar to the spectrum of naturally heated stage IV CM Pecora Escarpment 02010. The temperature-related mineralogical, chemical, isotopic and spectroscopic signatures defined in ALH 83100 will help to track the post-hydration thermal histories of carbonaceous chondrite meteorites, and samples returned from the primitive asteroids Ryugu and Bennu

Temporal and spatial analysis of the 2014-2015 Ebola virus outbreak in West Africa

West Africa is currently witnessing the most extensive Ebola virus (EBOV) outbreak so far recorded. Until now, there have been 27,013 reported cases and 11,134 deaths. The origin of the virus is thought to have been a zoonotic transmission from a bat to a two-year-old boy in December 2013 (ref. 2). From this index case the virus was spread by human-to-human contact throughout Guinea, Sierra Leone and Liberia. However, the origin of the particular virus in each country and time of transmission is not known and currently relies on epidemiological analysis, which may be unreliable owing to the difficulties of obtaining patient information. Here we trace the genetic evolution of EBOV in the current outbreak that has resulted in multiple lineages. Deep sequencing of 179 patient samples processed by the European Mobile Laboratory, the first diagnostics unit to be deployed to the epicentre of the outbreak in Guinea, reveals an epidemiological and evolutionary history of the epidemic from March 2014 to January 2015. Analysis of EBOV genome evolution has also benefited from a similar sequencing effort of patient samples from Sierra Leone. Our results confirm that the EBOV from Guinea moved into Sierra Leone, most likely in April or early May. The viruses of the Guinea/Sierra Leone lineage mixed around June/July 2014. Viral sequences covering August, September and October 2014 indicate that this lineage evolved independently within Guinea. These data can be used in conjunction with epidemiological information to test retrospectively the effectiveness of control measures, and provides an unprecedented window into the evolution of an ongoing viral haemorrhagic fever outbreak.status: publishe