Post-Brexit Britain and the pay culture: challenges and opportunities

This paper examines the impact of Brexit on financial services regulation in relation to three areas linked to executive remuneration. They are: the bonus cap; the clawback of pay; and the level of disclosure required by shareholders with regard to details of directors’ remuneration. It will be argued that legally Brexit will have little impact on any of the three areas. UK legislation has already incorporated a great deal of EU legislation. The status quo of retaining such legal restrictions seems sensible in light of public sentiment towards unfairness in executive compensation and uncertainty towards the Brexit negotiations. Nevertheless, London faces stiff competition from other major international financial centres in a post-Brexit era. The loss of single passporting rights is also encouraging major banks to invest in other European financial centres. Brexit creates opportunities too. With the integration of digital technology, it is possible to create convenient platforms where investors can access reports on executive remuneration

Post Brexit Britain and the Pay Culture: Challenges and Opportunities

This paper examines the impact of Brexit on the financial services regulation in relation to three areas linked to executive remuneration. They include: the bonus cap, the clawback of pay and the level of disclosure needed by shareholders regarding details of directors’ remuneration. It will be argued that legally, Brexit will have little impact on all three areas. UK legislation has already incorporated a great deal of EU legislation. Status quo of retaining such legal restrictions seems sensible in light of public sentiment towards unfairness in executive compensation and uncertainty towards the Brexit negotiations. Nevertheless, London faces stiff competition from other major international financial centres in a post-Brexit era. The loss of single passporting rights is also encouraging major banks to invest in other European financial centres. Brexit creates opportunities too. With the integration of digital technology, it is possible to create convenient platforms where investors can read reports on executive remuneration

Educating bankers on law, ethics and social values: a perspective from the US, the UK and Europe

The paper questions how global businesses can alter their attitudes to make them more ethical and transparent. It examines three causes of a financial catastrophe that are possibly linked to bankers’ attitudes and mindsets: bankers’ excessive greed that leads them to fall into ruinous temptations such as securitisation and short-termism,bankers’ behavioural limitations such as overconfidence and over optimism and finally bankers’ ignorance of financial products. The paper then considers an alternative model to confronting bankers’ deficiencies that is more sustainable in the long run: the tool of education. When there is so much disapproval of companies for their lack of corporate social responsibility, education can help significantly. Its role is three-fold: First, it can alert future leaders of the positives of acting selflessly and for socially responsible goals. Second, it can teach them of what the law actually says: that they must promote the company’s best interests – and not the shareholders’ short-term interests – a matter frequently ignored within business practice. Finally, via education future leaders can learn a thing or two about the behavioural weaknesses often characterising people in high executive positions; they can also learn about the risks of showing poor judgment and unfamiliarly of a business’ financial nuances and related risks. These ‘educational measures’ can help restore integrity back into banking whilst underlining the weight of ethics-based corporate culture

Corporate governance in the aftermath of the global financial crisis: Issues and action

Almost a decade has passed since the global financial crisis emerged; a crisis that has made companies, regulators and society more conscious of the possible failings in regulation, board function and shareholder behaviour. This paper discusses three interrelated corporate governance weaknesses linked to a financial crisis, and considers ways to reduce their impact in future. The first part discusses the role of regulatory and supervisory deficiencies as a primary cause of the crisis. It provides a concise overview of the flaws of the UK regulatory authority, and examines the reasons it fell short of the high professional standards in the execution of its supervisory obligations. Ways to improve the regulatory and supervisory authorities are also considered. In the next part, the paper examines the role played by the two primary internal organs of the company: the directors and the shareholders. It considers issues of directors’ training, accountability and shareholder engagement and deliberates upon the improvements that can be introduced to enhance the role of directors and shareholders within the corporate governance arena

The centre of the brain: Topographical model of motor, cognitive, affective, and somatosensory functions of the basal ganglia

The basal ganglia have traditionally been viewed as motor processing nuclei; however, functional neuroimaging evidence has implicated these structures in more complex cognitive and affective processes that are fundamental for a range of human activities. Using quantitative meta-analysis methods we assessed the functional subdivisions of basal ganglia nuclei in relation to motor (body and eye movements), cognitive (working-memory and executive), affective (emotion and reward) and somatosensory functions in healthy participants. We document affective processes in the anterior parts of the caudate head with the most overlap within the left hemisphere. Cognitive processes showed the most widespread response, whereas motor processes occupied more central structures. On the basis of these demonstrated functional roles of the basal ganglia, we provide a new comprehensive topographical model of these nuclei and insight into how they are linked to a wide range of behaviors.© 2012 Wiley Periodicals, Inc

The controversy of executive remuneration: pay ratios and other approaches

The regulation of executive pay needs a radical rethinking. Due to the current emphasis on the consequences of the pandemic on companies, and the calls for fairer pay designs, increased scrutiny of pay, pay gap reporting and accompanying narratives is inevitable. Adopting a clear policy on pay can prove a solid tool in promoting positive perceptions and encouraging a persuasive response to any adverse scrutiny of pay issues. Yet, regulating executive pay is a balancing act. Societies and the law must preserve companies’ freedom to decide their own executives’ pay whilst safeguarding fairness within pay structures. Clearly, in making laws on executive pay, governments in western economies must accommodate for many conflicting policy views and variables: whether to allow company boards to exercise their powers of management free of (further) government limitation, or to extend regulation in order to tackle the general public’s concern over executive greed and unethical pay structures

Post-Brexit Britain and the pay culture: challenges and opportunities

This paper examines the impact of Brexit on financial services regulation in relation to three areas linked to executive remuneration. They are: the bonus cap; the clawback of pay; and the level of disclosure required by shareholders with regard to details of directors’ remuneration. It will be argued that legally Brexit will have little impact on any of the three areas. UK legislation has already incorporated a great deal of EU legislation. The status quo of retaining such legal restrictions seems sensible in light of public sentiment towards unfairness in executive compensation and uncertainty towards the Brexit negotiations. Nevertheless, London faces stiff competition from other major international financial centres in a post-Brexit era. The loss of single passporting rights is also encouraging major banks to invest in other European financial centres. Brexit creates opportunities too. With the integration of digital technology, it is possible to create convenient platforms where investors can access reports on executive remuneration

Emotional facial activation induced by unconsciously perceived dynamic facial expressions

Do facial expressions of emotion influence us when not consciously perceived? Methods to investigate this question have typically relied on brief presentation of static images. In contrast, real facial expressions are dynamic and unfold over several seconds. Recent studies demonstrate that gaze contingent crowding (GCC) can block awareness of dynamic expressions while still inducing behavioural priming effects. The current experiment tested for the first time whether dynamic facial expressions presented using this method can induce unconscious facial activation. Videos of dynamic happy and angry expressions were presented outside participants' conscious awareness while EMG measurements captured activation of the zygomaticus major (active when smiling) and the corrugator supercilii (active when frowning). Forced-choice classification of expressions confirmed they were not consciously perceived, while EMG revealed significant differential activation of facial muscles consistent with the expressions presented. This successful demonstration opens new avenues for research examining the unconscious emotional influences of facial expressions

Distinct and Overlapping Brain Areas Engaged during Value-Based, Mathematical, and Emotional Decision Processing.

When comparing between the values of different choices, human beings can rely on either more cognitive processes, such as using mathematical computation, or more affective processes, such as using emotion. However, the neural correlates of how these two types of processes operate during value-based decision-making remain unclear. In this study, we investigated the extent to which neural regions engaged during value-based decision-making overlap with those engaged during mathematical and emotional processing in a within-subject manner. In a functional magnetic resonance imaging experiment, participants viewed stimuli that always consisted of numbers and emotional faces that depicted two choices. Across tasks, participants decided between the two choices based on the expected value of the numbers, a mathematical result of the numbers, or the emotional face stimuli. We found that all three tasks commonly involved various cortical areas including frontal, parietal, motor, somatosensory, and visual regions. Critically, the mathematical task shared common areas with the value but not emotion task in bilateral striatum. Although the emotion task overlapped with the value task in parietal, motor, and sensory areas, the mathematical task also evoked responses in other areas within these same cortical structures. Minimal areas were uniquely engaged for the value task apart from the other two tasks. The emotion task elicited a more expansive area of neural activity whereas value and mathematical task responses were in more focal regions. Whole-brain spatial correlation analysis showed that valuative processing engaged functional brain responses more similarly to mathematical processing than emotional processing. While decisions on expected value entail both mathematical and emotional processing regions, mathematical processes have a more prominent contribution particularly in subcortical processes

Anatomical substrates and neurocognitive predictors of daily numerical abilities in mild cognitive impairment.

Patients with mild cognitive impairment experience difficulties in mathematics that affect their functioning in the activities of everyday life. What are the associated anatomical brain changes and the cognitive correlates underlying such deficits? In the present study, 33 patients with Mild Cognitive Impairments (MCI) and 29 cognitively normal controls underwent volumetric MRI, and completed the standardized battery of Numerical Activities of Daily Living (NADL) along with a comprehensive clinical neuropsychological assessment. Group differences were examined on the numerical tasks and volumetric brain measures. The gray (GM) and white matter (WM) volume correlates were also evaluated. The results showed that relative to controls, the MCI group had impairments in number comprehension, transcoding, written operations, and in daily activities involving time estimation and money usage. In the volumetric measures, group differences emerged for the transcoding subtask in the left insula and left superior temporal gyrus. Among MCI patients, number comprehension and formal numerical performance were correlated with volumetric variability in the right middle occipital areas and right frontal gyrus. Money-usage scores showed significant correlations with left mesial frontal cortex, right superior frontal and right superior temporal cortex. Regression models revealed that neuropsychological measures of long-term memory, language, visuo-spatial abilities, and abstract reasoning were predictive of the patients' decline in daily activities. The present findings suggest that early neuropathology in distributed cortical regions of the brain including frontal, temporal and occipital areas leads to a breakdown of cognitive abilities in MCI that impacts on numerical daily functioning. The findings have implications for diagnosis, clinical and domestic care of patients with MCI