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The purpose of this chapter is to analyse how in recent years the rediscovery that extreme inequality is returning to advanced economies and has become widespread. What is…
The purpose of this chapter is to analyse how in recent years the rediscovery that extreme inequality is returning to advanced economies and has become widespread. What is at issue are the causes of this inequality. It is becoming clear that the wider population, particularly in Anglo-American economies have not shared in the growing wealth of the countries concerned, and that the majority of this wealth is being transferred on a continuous and systemic basis to the very rich. Corporate governance and the pursuit of shareholder value it is argued has become a major driver of inequality.
The current statistical evidence produced by leading authorities including the US Federal Reserve, World Economic Forum, Credit Suisse and Oxfam are examined. The policy of shareholder value and the mechanisms by which the distributions from business take place are investigated from a critical perspective.
While the Anglo-American economies are seeing a return to the extremes of inequality last witnessed in the 19th century, the causes of this inequality are changing. In the 19th century great fortunes often were inherited, or derived by entrepreneurs from the ownership and control of productive assets. By the late 20th century as Atkinson, Piketty and Saez (2011) and others have highlighted, the sustained and rapid inflation in top income shares have made a significant contribution to the accelerating rate of income and wealth inequality.
The intensification of inequality in advanced industrial economies, despite the consistent work of Atkinson and others, was largely neglected until the recent research of Picketty which has attracted international attention. It is now acknowledged widely that inequality is a serious issue; however, the contemporary causes of inequality remain largely unexplored.
The significance of inequality, now that it is recognized, demands policy and practical interventions. However, the capacity or even willingness to intervene is lacking. Further analysis of the debilitating consequences of inequality in terms of the efficiency and stability of economies and societies may encourage a more robust approach, yet the resolve to end extreme inequality is not present.
The analysis of inequality has not been neglected and this chapter represents a pioneering effort to relate the shareholder value orientation now dominant in corporate governance to the intensification of inequality.
Of the forty banks included in the world’s largest 500 firms, none operate on a global basis. All but one are heavily dependent on their home region, with an average of…
Of the forty banks included in the world’s largest 500 firms, none operate on a global basis. All but one are heavily dependent on their home region, with an average of 78.3 percent of their sales being intra‐regional. The other bank is European owned but has a majority of its sales in North America, i.e. it is host‐region oriented. The insularity of the world’s largest banks is not a sector‐ specific factor only nine of the world’s 500 largest firms are global, and the vast majority are like the banks, home‐region based.
The importance of succession in family business is well documented and there is general agreement that successful succession represents a key factor in the success or…
The importance of succession in family business is well documented and there is general agreement that successful succession represents a key factor in the success or otherwise of individual businesses owned and run by families. The importance of gender in family business succession is a much more recent topic, where initial work has focussed very much on the increasing tendency for women to take on the family business as a successor. Far less research, however, considers the scenario where a female leader passes on the business, whether that takes the form of family succession, a new leader from out with the family or indeed business sale. This dearth of research is not entirely surprising: whilst female leaders in a family business context are not new, their numbers have been relatively small and often mediated through the lens of co-preneurship with a male partner. As women increasingly succeed to and found family businesses however, the gender dimension within family business succession develops and the research response forms the basis for this chapter.
The Equator Principles are a transnational corporate social responsibility initiative in the project finance sector. In 2013, the Equator Principles Association celebrated…
The Equator Principles are a transnational corporate social responsibility initiative in the project finance sector. In 2013, the Equator Principles Association celebrated the tenth anniversary of its principles and at the same time the formal launch of the latest generation of the Equator Principles (EP III). The paper describes the historic development of the Equator Principles – from the initial drafting process in the early 2000s up to the latest review process which led to the third generation of the Equator Principles. The paper also analyzes the current state of affairs of the Equator Principles (Association) and gives a brief outlook on potential lines of (future) development. In particular, the paper deals with the following questions: What are the main characteristics of the Equator Principles framework? What are the relevant actors involved in the drafting and reviewing process? Why are the EPs and other organizational and associational codes of conduct in the finance sector so important? What has been achieved so far by the Equator Principles (Association) and the participating (financial) institutions and what remains to be done?
MOZAMBIQUE: Debt case will heighten cancellation calls
Switzerland has long been known as a world leader in the financial services arena. However, in recent years the Swiss banking industry has come under considerable attack…
Switzerland has long been known as a world leader in the financial services arena. However, in recent years the Swiss banking industry has come under considerable attack, in particular with regard to money laundering, Holocaust accounts and European Union tax evasion issues. This article examines Swiss banking confidentiality, reports perceptions of a sample of US Americans with regard to banking secrecy, and compares and contrasts perceptions with reality. The results of this study indicate that the general public holds negative perceptions of Swiss banking practices. This article should serve to correct misperceptions of Swiss banking held by the public at large and should be of particular interest to those involved in Swiss banking and the marketing of financial services.
Credit default swap (CDS) spreads may not represent the accurate credit risk levels (asymmetric spread behavior) of assets with the initiation of corporate events, such as…
Credit default swap (CDS) spreads may not represent the accurate credit risk levels (asymmetric spread behavior) of assets with the initiation of corporate events, such as merger, spin‐off or other similar events in which one entity succeeds to the obligations of another entity. The International Swaps and Derivatives Association (ISDA) succession language for the definition of succession events misleads the CDS market participants to determine CDS spreads. The purpose of this paper is to provide a conceptual framework for the relationship between the ISDA succession language and CDS spreads in order to clarify the factors behind the asymmetric spread behavior around several corporate activities.
The authors develop a conceptual driver model to establish a link between company characteristics and succession issues. Then, a succession model to evaluate the risk levels occurring with succession issues is designed.
The ISDA succession language has an influence on CDS spreads around corporate events. The explanatory approach provides the foundation for the understanding of the relationships between succession issues caused by several corporate events, involving particularly restructuring, refinancing and/or guarantee risk, and CDS spreads. Combination of the driver model and the succession model helps to assess the potential influence of succession events on CDS spreads.
Market participants should take into consideration the effects of the ISDA succession language on CDS spreads around succession of CDS.
Prior research related to the CDS has always focused on the economic determinants of CDS spreads. This paper is the first attempt to explain the relationship between the ISDA succession language and CDS spreads.
We live in the Age of Knowledge, which is impelling us towards the Age of Imagination. The technological wave rises and with it rises a wave of change that will affect…
We live in the Age of Knowledge, which is impelling us towards the Age of Imagination. The technological wave rises and with it rises a wave of change that will affect both the economy and society. When these two waves will reach the coast where knowledge meets ignorance, and how to ride them, are questions that require us to imagine the future. We must, therefore, embark on the vessel of imagination, leaving behind us the baggage of what we know and understand. Imagination is not just the springboard for ideas; it also acts to connect ideas in different ways that may blossom in the garden of an entrepreneurial renaissance. Symbols, metaphors and concepts that belong to our tacit knowledge come to light in our memory. It is from here that the imagination draws its lifeblood, broadening our horizons, inducing us to interact with others who may be the bearers of other cultures. Are we ready to engage in an imaginative learning process to join business with innovation and art? Are we prepared to design a wide-open white space where the actors of entrepreneurship, innovation and art can generate a constructive tension that will sweep away what appears to be mutual antagonism or incompatibility?