The ethics of shareholder value: duty, rights and football

How does a board of directors decide what is right? The contest over this question is frequently framed as a debate between shareholder value and stakeholder rights, between a utilitarian view of the ethics of corporate governance and a deontological one. This paper uses a case study with special circumstances that allow us to examine the conflict between shareholder value and other bases on which a board can act. In the autumn of 2010 the board of Liverpool Football Club sold the company to another investing group against the wishes of the owners. The analysis suggests the board saw more than one type of utility on which to base its decision and that one version resonated with perceived duties to stakeholders. This alignment of outcomes of strategic value with duties contrasted with the utility of shareholder value. While there are reasons to be cautious in generalizing, the case further suggests reasons why boards may reject shareholder value in opposition to mainstream notions of corporate governance, without rejecting utility as a base of their decisions

Institutional logics in research supervision

According to Halse and Malfroy (2010) research supervision should be viewed as a profession. Professions have their own institutional norms, of course; explicit norms are what makes something a profession, rather than a craft. But in the world of contemporary higher education, where the word "institution" is often used to denote the organization of the university and the bureaucracy of HE policy-making, the institutionalized aspects of professional life can get lost. This paper examines the growing literature on research supervision through the lenses of a) knowledge theory, with its tacit, explicit and latent dimensions; and b) new institutional theory, with its focus on the diffusion of norms of social practices through isomophorism. It identifies three competing institutional logics: the traditional "craft" approach, an emerging "factory" mentality of measurable outcomes and target, and a middle way – a "professional" logic. The paper concludes with a discussion of the role of accountability and how it influences the legitimacy of these competing institutional logics

Places and spaces: Control or experimentation in corporate governance?

For a quarter of a century, corporate governance in many countries has been viewed as a process of institutionalising codes of good conduct. Episodic shocks, induced by spectacular corporate failures, have created opportunities for more radical change, but such codes have proved resilient. But has this been process firmed up a thickening core? With each revision, the corporate governance community has come to live in a field increasing dominated by the ideas traditional actors – corporate management and mainstream institutional investors – who colonized the ill-defined territory of corporate governance at the outset. Over time, however, the changing investment landscape has undercut some of the principles on which this domination was based. Let us explore the philosophical underpinnings basis of the code, drawing on concepts from the writings of de Certeau (1984) and Turner (1977), to reflect on places, spaces, rituals, and explorations, to understand what creates and constitutes control and resilience, and what it says about the possibilities for innovation and experimentation

Alternatives within corporate ‘ownership’

Institutional investors have long played a central role in corporate governance but no more so than since the financial crisis of 2007-09. To counteract short-termism, the UK Stewardship Code (Financial Reporting Council, 2010) encouraged investors to engage with the companies in which they invest came first and develop a sense of ownership. France (Commission Europe, 2010; ORSE, 2011) and Germany (discussed in Roth, 2012) took similar actions. The European Union (European Commission, 2011, 2013) included investor engagement in its review of corporate governance, while in the US the Dodd-Frank Act (Library of Congress, 2010) gave shareholders new voting powers and made it easier to raise shareholder resolutions. Some funds that favour this approach now call themselves “shareowners” rather than “shareholders” (Butler & Wong, 2011). This approach assumes shareholders are able to prevent corporate excess and might want to. But obstacles arise from the changing structure and power balances in institutional investment: hedge funds, funds-of-funds, sovereign wealth, and the revival of shareholder activism. This paper takes its cue from a parallel debate about changes in structure and power in corporations. In his paper “After the corporation”, Davis (2013) provocatively argues that scholarship on organizations and industrial policy are based on an outdated conceptualization of the corporation. He describes how companies including Apple, Google, Facebook and Amazon are now giants in the eyes and portfolios of institutional investors. They are giants by market capitalization, but pigmies by employment. The disaggregation of production functions across industries makes the corporation of yore a relic of a previous industrial age. In the US at least, the old giants made up a large part of the social structure and services that has held society together. What happens to the structure of society “after the corporation”, he asks? This paper turns that spotlight on investors. The policy push towards stewardship evokes both a bygone era of family-owned enterprises and corporations controlled by grand financiers. But the patient capital of Warren Buffett is a model few follow, or could. New money from end-investors flows instead into funds-of-funds, detaching the end beneficiary even further from control. Setting public policy to make finance serve the whole economy as envisaged in the “universal owner” (Hawley & Williams, 2007; Urwin, 2011) - modelled – on the large pension fund seems a laudable goal. The economic interests of these investors lie more in long-term social advances than short-term trading profits. But such policy prescriptions may privilege a dying class of investor against other more vibrant ones. Moreover, they may legitimate shareholder primacy at a time when scholars and the rest of the policy framework question it (Armour, Deakin, & Konzelmann, 2003; Bainbridge, 2010; Stout, 2013). We – scholars, policymakers and practitioners alike – need to consider alternatives. Within the system of wealth creation and like the corporation, the traditional investor – that is, the universal owner – remains an important economic force. But what alternatives within the system will work as these investors decline as a social force? What alternatives arise “after the owner”

A Multivariate Local Rational Modeling Approach for Detection of Structural Changes in Test Vehicles

A data driven structural change detection method is described and evaluated where the data are acceleration and force measurements from a mechanical structure in the form of a vehicle. By grouping the measured signals as inputs and outputs an hypothesized MIMO linear dynamic relation between the inputs and outputs is assumed. It is assumed that baseline data are available to build statistical models for the estimated frequency function of the baseline system at selected frequencies. When new data is available, the monitoring algorithm re-estimates the non-parametric frequency function and uses a test statistic based on the statistical distance to detect possible change. To generate the frequency function estimates a non-parametric MIMO frequency function estimator based on the local rational model (LRM) method is developed. A statistical analysis of the proposed test statistic shows that it has an F-distribution for data from the baseline case. The method is evaluated on simulated data from a high fidelity full scale vehicle simulation generating both baseline data and data from a structurally changed vehicle. In the evaluation, the frequency response functions were estimated by the non-parametric LRM method, the parametric ARX estimate and the non-parametric ETFE. The results show that all three methods can detect the structural change while the LRM method is more robust with respect to the selection of the hyperparameters. Copyright (C) 2021 The Authors

Art in Corporate Governance: a Deweyan Perspective on Board Experience

This is the final version. Available on open access from Springer via the DOI in this recordCorporate governance sits at the intersection of many disciplines, among them law, business, management, finance, and accounting. The point of departure for large portions of this literature concerns the ugliness of greed, ambition, misdemeanors, and malfeasance of corporations, their directors, and those actors who hold shares in them. This essay takes a rather different starting point. Drawing upon insights from a distant field, it uses the discussion of aesthetics in Dewey's treatise on art to ask what motivates directors to act in ways that constitute the attention and engagement that we associate with the effectiveness of boards. Using Dewey's thinking about aesthetic experience, this paper examines the experience of organization boards, both in the literature and in the personal experience of the author. These observations point to need to reflect on motivation when considering both the practice of corporate governance and the policy frameworks in which it operates

The Fleetwood Half-orphan Asylum. Ideas in Fiction, or Fiction of Ideas?

In its creative and critical components, this study examines the intersection between philosophy, literary theory and analysis, and creative writing. It examines and then illustrates how philosophically engaged fiction – often called the novel of ideas – engages with the ideas it presents. Can – indeed, must – ideas inhabit works of literature, as critics like Mary McCarthy suggest? Or are philosophy and fiction at best uncomfortable housemates, as the philosopher and novelist Iris Murdoch and others assert? First, the creative project – The Fleetwood Half-Orphan Asylum – is a novel that sets off to explore a situation in which pragmatist philosophy challenges idealism. Much of it is set in a time – early twentieth century – when philosophical verities in general were threatened, setting ontology in confusing, complex, and uncertain directions. The process of writing, however, led to exploration of other philosophical stances. Second, the thesis examines literary theory and analysis of categories of fiction and then the specific category of the novel of ideas. To do so, it uses lenses drawn from three facets of psychology: heuristics and biases in cognitive psychology, the dilemma of exploitation and exploration in development psychology, and frame analysis from social psychology. Writing the creative component began as an attempt to explore how orphanages undertook care at a time when complex ideas based in pragmatist philosophy were challenging established norms. As the writing proceeded – that is, as the story unfolds – other philosophical discussions came into play. That process and the ideas that exploration uncovered, form the bridge between the novel and the critical essay of the thesis. The critical component discusses the dichotomies writers face as they situate their novels in the publishing landscape. Examining in greater detail one dichotomy – philosophically versus psychologically oriented writing – it then identifies that the term novel of ideas is used theoretical to describe at least two quite distinct roles for philosophy in fiction: enactment of well understood ideas, or exploration of confusing ones. It then shows analytically how that boundary blurs in two contemporary novels. With its discussion of issues in philosophy and the challenges to its role in literature in general and fiction in particular, Chapter 5 of the critical component integrates the critical and creative themes the thesis, viewed as a whole, addresses

Determination of thermophysical properties of ablative materials. Phase 1 - Laboratory determinations. Part B - Thermal conductivity and thermal diffusivity

Thermophysical property measurements on ablative materials for Apollo spacecraft propulsion system configuratio

Evaluating boards: A policy agenda in need of perspective

For at least 30 years, and with growing intensity through recurring corporate governance crises, public policy in many countries has been striving to encourage boards of directors to undertake regular evaluations. The policy push has stimulated much practical advice, many tools for evaluation, strong encouragement from professional bodies, and considerable skepticism from those being evaluated. While some scholars have sought to conceptualize the practice, we lack a fuller understanding that can help us see how the promised benefits and feared drawbacks arise. This Director Notes report reviews the policy context and practitioner accounts and builds frameworks for practice and policy analysis. The authors find that board evaluation is a multidimensional concept in which the interactions across the dimensions open paths to improvement of boards processes while also to unintended consequences. The authors then suggest avenues for future research and a shift in policy and practice toward greater experimentation