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This paper is about data, information, knowledge and judgment; their definitions and their parallel cognitive dimensionalities; and it is about their implications in innovation. This paper aims to discuss and illustrate the implications of this cognitive framework on innovation science and on the ability to innovate. To that end, the authors use a progression of examples and cases to identify and discuss new challenges and predicaments in innovation.

The authors discuss how the development of Chemistry, as a science, inspires this work. But the authors have purposely eschewed examples from mathematics or the natural sciences. Instead, the authors study business examples because they are more readily understood. However, the implications they reveal, on innovation, are no less significant. The explosive volume, complexity and requirements – for data, information, knowledge and intelligence in business – are arguably more messy, demanding and difficult. They are sociotechnical problems of unprecedented scale and qualitative change.

The authors frame their conclusion as the mega-nano hypothesis, which asserts that problems, at this new scale and qualitative difference, cannot be solved with conventional thinking and tired mental models. They obstruct the ability to innovate and impede creative thinking about theory.

The mega-nano hypothesis is consistent with historical trajectories in scientific development. Namely, when there are mega or nano changes of scale and frame-breaking phenomena, a new science is required to address the new and unprecedented problems that emerge.

To explain the new U.S. Securities and Exchange Commission (“SEC”) Rule 2a-5 (the “Fair Value Rule”) under the Investment Company Act of 1940 (the “1940 Act”), which addresses the valuation practices of registered investment companies and business development companies.

Provides an overview of the Fair Value Rule, followed by a more detailed summary of the key provisions, including relevant guidance provided by the SEC in the release adopting the Fair Value Rule.

The Fair Value Rule establishes a specific framework, a standard of baseline practices across funds, and a set of required functions that must be performed in order to determine in good faith the fair value of a fund’s investments for purposes of applying Section 2(a)(41) of the 1940 Act.

Practical guidance from experienced investment management lawyers.

This chapter analyses recent reforms of the derivative claim in the UK as implemented by the Companies Act 2006. Recent reforms and modernisation of company law is part of a drive to facilitate enterprise and enhance the attractiveness of the UK as a location in which to do business. The reforms of derivative claims are, naturally, part of this wider drive. The chapter focuses on those areas that are particularly relevant to the question of whether the new legal framework relating to derivative claims is likely to promote these goals.

This paper aims to highlight how an interpretative approach to law as posited by Dworkin may be used to remedy the tension between employment protection and corporate rescue laws.

This paper adopts a doctrinal and theoretical approach to law.

The tension between corporate rescue and employment protection laws affects both employees’ and business owners’ policy objectives on corporate insolvency. The theoretical perspectives of both the traditionalists and proceduralists have so far failed to provide a clear approach on how this tension may be balanced or remedied. This paper proposes that this tension may be remedied through interpretation, that is, by adopting Dworkin’s Interpretative Approach to Law.

Most researchers and academics have written extensively about the tension between corporate rescue and employment protection, but this paper is the first of its kind to propose a remedy to this tension through interpretation.

This is an illustrative case analyzing shareholder and accounting outcomes and legal issues resulting from a merger of two major publicly traded companies. In today's business world, the “urge to merge” is tempered by heightened shareholder activism. In response to this activism, boards must proceed with care when negotiating mergers. Challenges to mergers that appear to be in the shareholders' best interest occur often. As is the case here, shareholders and their well funded legal representatives, seek damages for alleged bad decisions. Conoco Oil and Phillips Petroleum announced their intention to merge in November 2001. At that time the cost of gasoline spiraled ever upward and large oil firms put heavy competitive pressure on smaller oil producer/refiners. The merger described as a “merger of equals”, intimated that neither Conoco nor Phillips shareholders would receive a financial advantage (or disadvantage) over other merging shareholders following the completion of the merger. Immediately following the announcement, Michael Iorio, a Conoco shareholder, filed a lawsuit, claiming damages to Conoco shareholders from the merger of the two firms.

This paper explores the advantages (for large investors) of directly owning productive assets, compared with indirect ownership through stock in corporations. Significant factors are agency costs and recent changes in the tax and regulatory environment. Recent corporate scandals have led to legislative and regulatory responses that significantly increase the monitoring costs and other burdens of becoming or remaining a public corporation. As a result, there has been a substantial increase in going-private transactions, particularly among smaller public companies. However, the pressures to go private are not entirely new. We trace the legal concept that the corporation is an entity separate and apart from its owners, showing how the legal status of corporations hinders resolution of conflicts among the parties to the enterprise. Thus, there have long been fundamental flaws inherent in the corporation as the form of organization for certain activities. Direct ownership of major assets by investors prevents future expropriation of resources, and is preferable to corporate ownership whenever other alternatives for indemnification or liability limitation are available (such as insurance, limited partnerships, limited liability companies, etc.). Finally, the renewal of direct ownership is not a radical shift, but a return to long-established tradition in the organization of business activities.

The purpose of this paper is to describe the implications of two recent decisions in Ryan v. Gifford and In Re Tyson Foods, Inc. concerning stock options backdating, “spring‐loading,” and “bullet‐dodging.”

The paper summarizes the facts of the two cases, defines spring‐loading and bullet‐dodging, and explains how the court held in both cases that plaintiffs had sufficiently alleged demand futility, that directors of the two corporations had shown bad faith and breached their duty of loyalty, and that the doctrine of fraudulent concealment took precedence over the statute of limitations.

The paper finds that backdating of options is so egregious that board approval cannot meet the test of business judgment and there is a substantial likelihood of director liability. A director who intentionally uses inside knowledge not available to shareholders in order to enrich employees while avoiding shareholder‐imposed requirements cannot be said to be acting loyally and in good faith as a fiduciary. The best practice for companies is only to grant options that are in strict compliance with their shareholder‐approved option plans as well as applicable accounting, tax, and disclosure rules, and on either fixed‐in‐advance dates or when the companies' insiders would be free to trade.

The paper provides a thorough explanation of two of the most important court decisions to date on stock options backdating, spring‐loading, and bullet‐dodging.

We argue that the stakeholder and CSR literature can benefit from more systematic thinking about ownership. We discuss general notions of ownership in the economics and legal literature and the entrepreneurial notion of ownership we have developed in prior work. On this basis, we argue that stakeholder theory needs to deal more systematically with ownership as an economic function that can be exercised with greater or lesser ability, may be complementary to other economic functions, and works better when assigned to homogeneous groups. Some stakeholder groups are likely to lack what we call “ownership competence,” even if they have made relationship-specific investments, in part because of a diversity of interests. We also discuss CSR from the perspective of ownership and support Friedman’s original position, but with a twist. The point of Friedman’s paper is not that firms “should” maximize profits, but that managerial pursuit of “socially responsible” activities in a discretionary way imposes costs on owners. We suggest this problem is exacerbated with entrepreneurial managers who can devise new ways to prop up their self-interested actions with new creative CSR initiatives.

The US restaurant industry and the food‐service industry have undergone tremendous changes during the last decade owing to demographic changes, changes in the family structure, the increase in the number of working women and senior citizens, advances in technology (inventory management, customer order processing, accounting/financial systems, etc.), availability of financing, changes in the real estate industry (location, negotiation with malls, relationships with developers, etc.), intense competition, the growth in the types and number of marketing channels (including the Internet), increasing number of drive‐through customers, employee training requirements, changes in labor laws, the rate of implementation of technology, changes in food sourcing/purchasing, the growth of the franchising business model, and increasing regulation. These factors have combined to shape the strategic, legal, economic and operational considerations that executives and decision makers should thoroughly understand. This article discusses the issues and challenges facing one company in these two industries and how management and banks have reacted, and then explains strategies for the future. Also discussed are relevant considerations for financial sponsors and companies. Most data and analysis are as of April 2000.