Enterprise Risk Management, Corporate Governance And Systemic Risk: Some Research Perspectives

The general goal of Enterprise Risk Management (ERM) processes is to generate economic value through the coverage of firm business risk, on the one hand, and by exploiting the positive side of uncertainty conditions, on the other hand. The increasing attention attributed to ERM in the creation of economic value has led to even greater interactions between risk management mechanisms and the corporate governance system. In other words, in the last two decades, the relationships between corporate governance and ERM increased since the ERM processes have been considered more and more as critical drivers to combine strategic objectives with relative low volatility of company performance. The basic idea is that a good corporate governance system must deal about specific risks along with their interactions and, at the same time, the firm’s business risk as a whole. Moreover, an efficient and effective ERM system provides clear information about linkages between strategic opportunities and risk exposure and offers tools able to manage in an optimal way the negative side of business risk (or downside risk) as wellas its positive side (or upside risk). Accordingly, extant studies concerning the relationships between ERM and corporate governance have been focusing on a micro-level of analyses (i.e., the individual organization) and, specifically, on a firm’s benefits that stem from the adoption of proper ERM processes that are consistent with corporate governance goals and are able to sustain the increase of economic value while maintaining a bearable business risk over time. From our initial analyses, a gap in literature arises. We argue that the interdependence between ERM and corporate governance may be analyzed from a broader point of view as well (i.e., the firm and its task environment composed by its suppliers, customers, and partners). In particular, our research idea is to enlarge traditional studies about interrelations between corporate governance and ERM taking into account whether such interrelations could be a driver of risk transfer from the focal organization to other organizations that belong to its task environment. Moreover, this study aims to deepen the mechanisms by which the transfer of risk from a focal organization to its task environment may foster the emergence of systemic risk, i.e., a macro risk coming from domino and/or network effects. Therefore, our paper aims to find new research areas by combining micro and macro issues tied to corporate governance, ERM and systemic risk. The starting point of our work is the three following assumptions: 1) The compliance of a firm to ERM processes as well as to corporate governance rules implies the reduction as much as possible of firm business risk; 2) The reduction of the firm business risk leads to externalizing the firm business risk through risk-sharing mechanisms; 3) The risk-sharing may arise like a driver of systemic risk especially in those industries featured by strong network interrelations. Starting from the above assumptions, the paper goal is to open a new research area which combines four academic fields (ERM, corporate governance, corporate finance, and macro-finance). So far, our initial findings tell us that the following research questions arise: RQ1: What are the conditions under which the transfer of business risk towards organizations that belong to a firm task environment is likely to become a source of systemic risk in a specific industry? RQ2: How does the capital structure of a focal firm affect its propensity to transfer business risk not only to commercial but also to financial stakeholders included in firm task environment? RQ3: How does the transfer of business risk influence the capital cost of the focal firm as well as of the organizations that absorbed such risk

Positive or negative voting premium: what happened to private benefits in Italy?

A large body of research deals with voting premium as a proxy of private benefit of control. Almost all of them find positive voting premium, in particular in Italy. Therefore appears interesting to ask what is the current status of private benefits of control in Italy in the last decade (2007-2017). Surprisingly, we show three major findings: i) reduction of non-voting share in the Italian scenario; ii) prevalence of negative voting rights premium more than positive ones, thus conflicting with the assumption and the observations by other researchers; iii) limits of the voting premium method. Our aim is that this study, despite its limitations, may encourage further researches focused on the analysis of the improvement and the change in the Italian corporate governance. The article points out that interesting evidence already exists, although still much remains to do in the future

Open Innovation, ambiguity and technological convergence

Objectives. Current paper aims to provide a fresh conceptual framework on the relationship among open innovation, decision ambiguity, and technological convergence. We argue that there is a curvilinear relationship between open innovation and both technological convergence and ambiguity. Contained level of convergence and ambiguity foster open innovation, whilst an excess of them is an impediment to collaboration. Technological convergence further acts as a moderator for ambiguity, in light of the benefits of isomorphism. Methodology. We propose a conceptual framework for open innovation decisions after accurately reviewing the main literature antecedents. Findings. We suggest an inverse u-shaped relationship between open innovation and either ambiguity or technological convergence. Research limits. In future, the theoretical framework proposed by thus study has to be tested with robust and proper statistical techniques on large scale samples. Practical implications. The model offers a heuristic for open innovation decisions under ambiguity. Originality of the study. To the best of our knowledge, the relationship linking open innovation, technological convergence and ambiguity emerges as a literature gap. This study tackles this issue, proposing an interpretation for the analysis of alliances decision in innovation

Quantifying the behavior of stock correlations under market stress

Understanding correlations in complex systems is crucial in the face of turbulence, such as the ongoing financial crisis. However, in complex systems, such as financial systems, correlations are not constant but instead vary in time. Here we address the question of quantifying state-dependent correlations in stock markets. Reliable estimates of correlations are absolutely necessary to protect a portfolio. We analyze 72 years of daily closing prices of the 30 stocks forming the Dow Jones Industrial Average (DJIA). We find the striking result that the average correlation among these stocks scales linearly with market stress reflected by normalized DJIA index returns on various time scales. Consequently, the diversification effect which should protect a portfolio melts away in times of market losses, just when it would most urgently be needed. Our empirical analysis is consistent with the interesting possibility that one could anticipate diversification breakdowns, guiding the design of protected portfolios

Molecular response and quality of life in chronic myeloid leukemia patients treated with intermittent TKIs: First interim analysis of OPTkIMA study

31noBackground: Intermittent treatment with TKIs is an option for the great majority (70%–80%) of CML patients who do not achieve a stable deep molecular response and are not eligible for treatment discontinuation. For these patients, the only alternative is to assume TKI continuously, lifelong. Methods: The Italian phase III multicentric randomized OPTkIMA study started in 2015, with the aim to evaluate if a progressive de-escalation of TKIs (imatinib, nilotinib, and dasatinib) is able to maintain the molecular response (MR3.0) and to improve Health Related Quality of Life (HRQoL). Results: Up to December 2018, 166/185 (90%) elderly CML patients in stable MR3.0/MR4.0 completed the first year of any TKI intermittent schedule 1 month ON and 1 month OFF. The first year probability of maintaining the MR3.0 was 81% and 23.5% of the patients who lost the molecular response regained the MR3.0 after resuming TKI continuously. Patients’ HRQoL at baseline was better than that of matched peers from healthy population. Women was the only factor independently associated with worse baseline HRQoL (p > 0.0001). Overall, global HRQoL worsened at 6 (p < 0.001) but returned to the baseline value at 12 months and it was statistically significantly worse in women (p = 0.001). Conclusions: De-escalation of any TKI by 1 month ON/OFF schedule maintains the MR3.0/MR4.0 in 81% of the patients during the first 12–24 months. No patients progressed to accelerated/blastic phase, all the patients (23.5%) losing MR3.0 regained the MR3.0 and none suffered from TKI withdrawn syndrome. The study firstly report on HRQoL in elderly CML patients moving from a continuous daily therapy to a de-escalated intermittent treatment.openopenMalagola M.; Iurlo A.; Abruzzese E.; Bonifacio M.; Stagno F.; Binotto G.; D'Adda M.; Lunghi M.; Crugnola M.; Ferrari M.L.; Lunghi F.; Castagnetti F.; Rosti G.; Lemoli R.M.; Sancetta R.; Coppi M.R.; Corsetti M.T.; Rege Cambrin G.; Romano A.; Tiribelli M.; Russo Rossi A.; Russo S.; Aprile L.; Gandolfi L.; Farina M.; Bernardi S.; Polverelli N.; Roccaro A.M.; De Vivo A.; Baccarani M.; Russo D.Malagola, M.; Iurlo, A.; Abruzzese, E.; Bonifacio, M.; Stagno, F.; Binotto, G.; D'Adda, M.; Lunghi, M.; Crugnola, M.; Ferrari, M. L.; Lunghi, F.; Castagnetti, F.; Rosti, G.; Lemoli, R. M.; Sancetta, R.; Coppi, M. R.; Corsetti, M. T.; Rege Cambrin, G.; Romano, A.; Tiribelli, M.; Russo Rossi, A.; Russo, S.; Aprile, L.; Gandolfi, L.; Farina, M.; Bernardi, S.; Polverelli, N.; Roccaro, A. M.; De Vivo, A.; Baccarani, M.; Russo, D

Evidence from diatom-bound nitrogen isotopes for subarctic Pacific stratification during the last ice age and a link to North Pacific denitrification changes

Author Posting. © American Geophysical Union, 2007. This article is posted here by permission of American Geophysical Union for personal use, not for redistribution. The definitive version was published in Paleoceanography 22 (2007): PA1215, doi:10.1029/2005PA001205.In a piston core from the central Bering Sea, diatom microfossil-bound N isotopes and the concentrations of opal, biogenic barium, calcium carbonate, and organic N are measured over the last glacial/interglacial cycle. Compared to the interglacial sections of the core, the sediments of the last ice age are characterized by 3‰ higher diatom-bound δ 15N, 70 wt % lower opal content and 1200 ppm lower biogenic barium. Taken together and with constraints on sediment accumulation rate, these results suggest a reduced supply of nitrate to the surface due to stronger stratification of the upper water column of the Bering Sea during glacial times, with more complete nitrate consumption resulting from continued iron supply through atmospheric deposition. This finding extends the body of evidence for a pervasive link between cold climates and polar ocean stratification. In addition, we hypothesize that more complete nutrient consumption in the glacial age subarctic Pacific contributed to the previously observed ice age reduction in suboxia and denitrification in the eastern tropical North Pacific by lowering the nutrient content of the intermediate-depth water formed in the subpolar North Pacific. In the deglacial interval of the Bering Sea record, two apparent peaks in export productivity are associated with maxima in diatom-bound and bulk sediment δ 15N. The high δ 15N in these intervals may have resulted from greater surface nutrient consumption during this period. However, the synchroneity of the deglacial peaks in the Bering Sea with similar bulk sediment δ 15N changes in the eastern Pacific margin and the presence of sediment lamination within the Bering Sea during the deposition of the productivity peaks raise the possibility that both regional and local denitrification worked to raise the δ 15N of the nitrate feeding Bering Sea surface waters at these times.Financial support for this work was provided by NSF grants OCE-0136449, OCE-9981479, ANT-0453680, by BP and Ford Motor Company through the Princeton Carbon Migration Initiative, and by a NDSEG fellowship to B.G.B. Work conducted aboard the USCG Healy (Healy 0202) was funded by grant OPP-9912122

Determinants of frontline tyrosine kinase inhibitor choice for patients with chronic-phase chronic myeloid leukemia: A study from the Registro Italiano LMC and Campus CML

BackgroundImatinib, dasatinib, and nilotinib are tyrosine kinase inhibitors (TKIs) approved in Italy for frontline treatment of chronic-phase chronic myeloid leukemia (CP-CML). The choice of TKI is based on a combined evaluation of the patient's and the disease characteristics. The aim of this study was to analyze the use of frontline TKI therapy in an unselected cohort of Italian patients with CP-CML to correlate the choice with the patient's features. MethodsA total of 1967 patients with CP-CML diagnosed between 2012 and 2019 at 36 centers throughout Italy were retrospectively evaluated; 1089 patients (55.4%) received imatinib and 878 patients (44.6%) received a second-generation (2G) TKI. ResultsSecond-generation TKIs were chosen for most patients aged &lt;45 years (69.2%), whereas imatinib was used in 76.7% of patients aged &gt;65 years (p &lt; .001). There was a predominant use of imatinib in intermediate/high European long-term survival risk patients (60.0%/66.0% vs. 49.7% in low-risk patients) and a limited use of 2G-TKIs in patients with comorbidities such as hypertension, diabetes, chronic obstructive pulmonary disease, previous neoplasms, ischemic heart disease, or stroke and in those with &gt;3 concomitant drugs. We observed a greater use of imatinib (61.1%) in patients diagnosed in 2018-2019 compared to 2012-2017 (53.2%; p = .002). In multivariable analysis, factors correlated with imatinib use were age &gt; 65 years, spleen size, the presence of comorbidities, and &amp; GE;3 concomitant medications. ConclusionsThis observational study of almost 2000 cases of CML shows that imatinib is the frontline drug of choice in 55% of Italian patients with CP-CML, with 2G-TKIs prevalently used in younger patients and in those with no concomitant clinical conditions. Introduction of the generic formulation in 2018 seems to have fostered imatinib use

Deglacial diatom productivity and surface ocean properties over the Bermuda Rise, northeast Sargasso Sea

Author Posting. © American Geophysical Union, 2009. This article is posted here by permission of American Geophysical Union for personal use, not for redistribution. The definitive version was published in Paleoceanography 24 (2009): PA4101, doi:10.1029/2008PA001729.Diatom assemblages document surface hydrographic changes over the Bermuda Rise. Between 19.2 and 14.5 ka, subtropical diatom species and Chaetoceros resting spores dominate the flora, as in North Atlantic productive regions today. From 16.9 to 14.6 ka, brackish and fresh water diatoms are common and their contribution is generally coupled with total diatom abundance. This same interval also contains rare grains of ice-rafted debris. Coupling between those proxies suggests that successive discharge of icebergs might have stimulated productivity during Heinrich event 1 (H1). Iceberg migration to the subtropics likely created an isolated environment involving turbulent mixing, upwelled water, and nutrient-rich meltwater, supporting diatom productivity in an otherwise oligotrophic setting. In addition, the occurrence of mode water eddies likely brought silica-rich waters of Southern Ocean origin to the euphotic zone. The persistence of lower-salinity surface water beyond the last ice rafting suggests continued injection of fresh water by cold-core rings and advection around the subtropical gyre. These results indicate that opal productivity may have biased estimates of meridional overturning based on 231Pa/230Th ratios in Bermuda Rise sediments during H1.Support for this research was provided by the Fundação para a Ciência e Tecnologia through the grant BPD/27214/2006 to I. M. Gil

Role of blood cells dynamism on hemostatic complications in low-risk patients with essential thrombocythemia

Patients with essential thrombocythemia (ET) aged less than 60 years, who have not suffered a previous vascular event (low-risk patients), may develop thrombotic or hemorrhagic events. So far, it has not been possible to identify useful markers capable of predicting which of these patients are more likely to develop an event and therefore who needs to be treated. In the present study, we analysed the relationship between vascular complications and longitudinal blood counts of 136 low-risk ET patients taken over a sustained period of time (blood cells dynamism). After a median follow-up of 60 months, 45 out of 136 patients (33%) suffered 40 major thrombotic and 5 severe hemorrhagic complications. A total number of 5,781 blood counts were collected longitudinally. Thrombotic and hemorrhagic events were studied together (primary endpoint) but also separately (thrombotic alone = secondary endpoint; hemorrhagic alone = tertiary endpoint). The primary endpoint showed no significant association between platelet and WBC count at diagnosis and risk of any event (platelet, p = 0.797; WBC, p = 0.178), while Hb at baseline did show an association (p = 0.024). In the dynamic analysis with Cox regression model, where the blood count values were studied by time of follow-up, we observed that the risk for Hb was 1.49 (95% CI 1.13-1.97) for every increase of 1 g/dL, and that this risk then marginally decreased during follow-up. WBC was associated with an increased risk at baseline for every increase of 1 7 10(9)/L (hazard ratio (HR) 1.07, 95% CI 1.01-1.13, p = 0.034), the risk was stable during follow-up (HR 0.95, p = 0.187 at 60 months). Also, for each increment at baseline of 100 7 10(9) platelets/L, HR was increased by 1.08 (95% CI 0.97-1.22, p = 0.159) and decreases during follow-up. In conclusion, this study is the first to evaluate in ET low-risk patients, the risk of developing a thrombotic/hemorrhagic event considering blood counts over time. Overall our study shows that the risk changes over time. For example, the risk associated with WCC is not linear as previously reported. An interesting new finding is that PLT and even Hb contribute to the risk of developing vascular events. Future treatments should take into consideration these findings and aim to control all parameters over time. We believe this early study may help develop a dynamic analysis model to predict thrombosis in the single patient. Further studies are now warranted to further validate our findings

Managing chronic myeloid leukemia for treatment-free remission: A proposal from the GIMEMA CML WP

Several papers authored by international experts have proposed recommendations on the management of BCR-ABL11 chronic myeloid leukemia (CML). Following these recommendations, survival of CML patients has become very close to normal. The next, ambitious, step is to bring as many patients as possible into a condition of treatment-free remission (TFR). The Gruppo Italiano Malattie EMatologiche dell'Adulto (GIMEMA; Italian Group for Hematologic Diseases of the Adult) CML Working Party (WP) has developed a project aimed at selecting the treatment policies that may increase the probability of TFR, taking into account 4 variables: the need for TFR, the tyrosine kinase inhibitors (TKIs), the characteristics of leukemia, and the patient. A Delphi-like method was used to reach a consensus among the representatives of 50 centers of the CML WP. A consensus was reached on the assessment of disease risk (EUTOS Long Term Survival [ELTS] score), on the definition of the most appropriate age boundaries for the choice of first-line treatment, on the choice of the TKI for first-line treatment, and on the definition of the responses that do not require a change of the TKI (BCR-ABL1 ≤10% at 3 months, ≤1% at 6 months, ≤0.1% at 12 months, ≤0.01% at 24 months), and of the responses that require a change of the TKI, when the goal is TFR (BCR-ABL1 &gt;10% at 3 and 6 months, &gt;1% at 12 months, and &gt;0.1% at 24 months). These suggestions may help optimize the treatment strategy for TFR