Beyond shareholder primacy? Reflections on the trajectory of UK corporate governance.

Core institutions of UK corporate governance, in particular the City Code on Takeovers and Mergers, the Combined Code on Corporate Governance and the law on directors’ duties, are strongly orientated towards the norm of shareholder primacy. Beyond the core, however, stakeholder interests are better represented, in particular at the intersection of insolvency and employment law. This reflects the influence of European Community laws on information and consultation of employees. In addition, there are signs that some institutional shareholders are redirecting their investment strategies, under government encouragement, away from a focus on short-term returns, in such a way as to favour stakeholder-inclusive practices by firms. On this basis we suggest that the UK system is currently in a state of flux and that the debate over shareholder primacy has not been concluded

Beyond the Hypercube:Evolutionary Accessibility of Fitness Landscapes with Realistic Mutational Networks

Evolutionary pathways describe trajectories of biological evolution in the space of different variants of organisms (genotypes). The probability of existence and the number of evolutionary pathways that lead from a given genotype to a better-adapted genotype are important measures of accessibility of local fitness optima and the reproducibility of evolution. Both quantities have been studied in simple mathematical models where genotypes are represented as binary sequences of two types of basic units, and the network of permitted mutations between the genotypes is a hypercube graph. However, it is unclear how these results translate to the biologically relevant case in which genotypes are represented by sequences of more than two units, for example four nucleotides (DNA) or 20 amino acids (proteins), and the mutational graph is not the hypercube. Here we investigate accessibility of the best-adapted genotype in the general case of K > 2 units. Using computer generated and experimental fitness landscapes we show that accessibility of the global fitness maximum increases with K and can be much higher than for binary sequences. The increase in accessibility comes from the increase in the number of indirect trajectories exploited by evolution for higher K. As one of the consequences, the fraction of genotypes that are accessible increases by three orders of magnitude when the number of units K increases from 2 to 16 for landscapes of size N ∼ 106 genotypes. This suggests that evolution can follow many different trajectories on such landscapes and the reconstruction of evolutionary pathways from experimental data might be an extremely difficult task

Understanding learner behaviour in online courses with Bayesian modelling and time series characterisation

The intrinsic temporality of learning demands the adoption of methodologies capable of exploiting time-series information. In this study we leverage the sequence data framework and show how data-driven analysis of temporal sequences of task completion in online courses can be used to characterise personal and group learners’ behaviors, and to identify critical tasks and course sessions in a given course design. We also introduce a recently developed probabilistic Bayesian model to learn sequential behaviours of students and predict student performance. The application of our data-driven sequence-based analyses to data from learners undertaking an on-line Business Management course reveals distinct behaviors within the cohort of learners, identifying learners or groups of learners that deviate from the nominal order expected in the course. Using course grades a posteriori, we explore differences in behavior between high and low performing learners. We find that high performing learners follow the progression between weekly sessions more regularly than low performing learners, yet within each weekly session high performing learners are less tied to the nominal task order. We then model the sequences of high and low performance students using the probablistic Bayesian model and show that we can learn engagement behaviors associated with performance. We also show that the data sequence framework can be used for task-centric analysis; we identify critical junctures and differences among types of tasks within the course design. We find that non-rote learning tasks, such as interactive tasks or discussion posts, are correlated with higher performance. We discuss the application of such analytical techniques as an aid to course design, intervention, and student supervision

The Disclosure of Directors Share Option Information in UK Companies

This paper considers the empirical determinants of the quality of information disclosed about directors' share options in a sample of large companies in 1994 and 1995. Policy recommendations, consolidated in the recommendations of the Greenbury report, argue for full and complete disclosure of director option information. In this paper two modest contributions to the UK empirical literature are made. First, the current degree of option information disclosure in the FTSE 350 companies is documented. Second, option information disclosure as a function of variables that are thought to influence corporate costs of disclosure is modelled. The results have implications for corporate governance. Specifically, support is offered for the monitoring function of nonexecutive directors. In addition, nondisclosure is found to be related to variables which proxy proprietary costs of revealing information (such as company size)

Does 'Best Practice' in Setting Executive Pay in the UK Encourage 'Good' Behaviour?

We examine how UK listed companies set executive pay, reviewing the implications of following best practice in corporate governance and examining how this can conflict with what shareholders and other stakeholders might perceive as good behaviour. We do this by considering current governance regulation in the light of interviews with protagonists in the debate, setting out the dilemmas faced by remuneration-setters, and showing how the processes they follow can lead to ethical conflicts. Current ?best? practice governing executive pay includes the use of market benchmarks to determine salary and bonus levels, significant levels of performance-related pay, the desire for executives to hold equity in their companies, the disclosure of total shareholder return compared to an index, and a perceived need for conformity, in order to grant legitimacy to policies. Whilst each of these may in some circumstances lead to good practice, each has the potential to cause dysfunctional behaviour in executives. Overall, we conclude that although best practice might drive good executive behaviour that coincides with the company?s and key stakeholders? objectives, there are many reasons why it should not

Econometric Modelling of UK Executive Compensation

Looks briefly at theories underlying the correlation between company performance and executive compensation, develops a mathematical model and applies it to results which show a significant positive link between the highest paid director’s compensation and total shareholder returns, but not with earnings per share. Considers consistency with other research, notes the influence of company size on executive pay and calls for further research on this important issue of corporate governance