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To review the key facets of a performance measurement system (PMS) and report on the development of a new model based on the European Foundation of Quality Management (EFQM) excellence model.

The research involved detailed literature reviews and action research within the case study organisation. It involved the design of an integrated business improvement system (IBIS) that enables proactive performance measurement within an organisation.

Key performance indicators (KPIs) are now widely used in the construction industry but there is little evidence that they are being used as an integral and systematic part of an overall PMS. The approach proposed here and encapsulated in IBIS is intended to improve current practice.

The research found that the active engagement of both senior management and potential end‐users is vital for the successful design and implementation of a PMS.

The novelty of the paper lies in the detailed description of the stages followed in the development of the IBIS, and the model itself. It will be of value to researchers and business improvement managers both within and outside the construction industry

Traditionally businesses have measured their performance solely in financial terms. This limited approach has been challenged, with the introduction of the concept of key performance indicators (KPIs) for non‐financial results. In response to the Latham and Egan Reports, the UK construction industry has developed its own set of KPIs. However, their effective use has been limited. This paper reviews these and other construction KPIs and concludes that most of the KPIs used are post event, lagging measures that do not provide the opportunity to change. Their results are not validated and thus are open to interpretation. The result is that KPIs are being used within the industry as a marketing tool, and not as an integral part of business management. This paper distinguishes between three types of measure and suggests a framework for their effective use within an overall performance measurement system based on change action driven by results.

Exposure risk managers can hedge exchange rate risk with either currency futures or currency options. It is generally suggested that hedgers should choose a hedge instrument that matches the risk profile of the underlying currency position as closely as possible. This advice, however, ignores the possibility that the hedging effectiveness may differ for the alternate risk management tools. This study compares the effectiveness of currency futures and currency options as hedging instruments for covered and uncovered currency positions. Based on Ederington's portfolio theory of hedging, the results show that currency futures provide the more effective covered hedge, while currency options (used to construct a synthetic futures contract) are more effective for an uncovered hedge. Hence, exposure risk managers do not have to sacrifice hedging effectiveness to obtain the desired risk profile. Corporations engaged in international business transactions are commonly exposed to exchange rate risk. Since management is concerned with currency exposure, it can hedge the anticipated exchange rate risk either with futures or options. The choice of the appropriate hedging tool is generally influenced by the type of currency exposure (transaction, translation, or economic risk), the size of the firm, the industry effect, the risk preference of the manager or the firm and his/her familiarity with the available financial instruments and techniques. It is also suggested that a hedger should choose a hedge instrument that matches the risk profile of the underlying currency position as closely as possible. Hence, futures contracts are more suitable for covered hedges, while option contracts are best used for uncovered hedges. Hedging effectiveness of these two hedge instruments must be considered as well in order to evaluate the cost of obtaining the desired risk profile. Some empirical research has shown that the futures contract provides both an appropriate risk profile and a more effective hedge than an options contract for covered positions. If these findings also hold for uncovered currency positions, then the hedging decision involves a trade‐off between the desired risk profile and hedging effectiveness. That is, a hedger would have to decide whether the extra risk protection afforded by the attractive risk profile of options is worth the loss in hedging performance. This study compares the hedging effectiveness of currency futures and currency options for both covered and uncovered positions. Ederington's risk‐minimizing approach is applied to estimate the hedging effectiveness and the least risk hedge ratios which, in turn, are used to assess the trade‐off between risk profile and hedging performance.

To discuss possible disadvantages and other implications for private investment fund managers of issuing side letters to certain investors.

Discusses the relatively common practice of issuing side letters; issues surrounding side letters that relate to private equity funds and hedge funds; recent SEC pronouncements regarding side letters; industry practices, including disclosure issues and corporate‐related issues; and ERISA consequences.

Side letters (i.e. agreements that afford investors of a private investment fund with rights and/or benefits that are different, and often superior, to those granted to such investors under the governing documents of the fund) have been utilized for years by sponsors of private investment funds. In fact, in many cases, it has been impossible for sponsors of private investment funds to close on subscriptions from large and/or strategic investors unless they agree to provide such investors with side letters. In light of the recent focus of the US Securities and Exchange Commission (the “SEC”) on the use of side letters by hedge fund managers, fund managers should consider what affect certain side letter provisions may have on the fund and its investors, in particular, the consequences such side letters will have under the Employee Retirement Income Security Act of 1974 (“ERISA”).

Useful reference for fund managers that describes the potential issues related to side letters.

Hedge funds increasingly are becoming a focus of investors and U.S. regulatory agencies including the U.S. Securities and Exchange Commission (the “SEC”), the U.S. Treasury Department, the National Association of Securities Dealers, and the Commodity Futures Trading Commission as enhanced regulatory attention is forcing the hedge fund industry for the first time since the near‐collapse of Long‐Term Capital Management, L.P. in late 1998 to examine itself more closely. In light of the dismal performance of U.S. stock market indices over the past several years, investors are turning to “absolute” return vehicles, such as hedge funds, that are able to generate current positive returns in a market that has returned consistently laggard results. Investors’ ability to invest in hedge funds has been further enhanced by the increase of hedge funds‐of‐funds registered under the U.S. Investment Company Act of 1940, as amended (the “1940 Act”). Simultaneously, over the past 18 months, the SEC has become increasingly concerned with a multitude of industry occurrences including (i) the widening access of investors to hedge funds, (ii) the unregulated nature of hedge funds, potentially leading to fraud or conflicts of interest with their investors, and (iii) the impact of hedge funds on the markets, especially in relation to their use of short selling. As U.S. regulatory attention remains focused on the hedge fund industry and industry practice and the themes of potential new regulations become apparent, it has become a cautionary period for hedge fund sponsors and investment managers.

Introduction In a world of increased uncertainty about the future value of exchange rates and increased visibility of foreign exchange gains and losses, it is not surprising that both commercial and financial firms have become more concerned about minimizing foreign exchange risks. Once a company becomes involved in international trade, be it the formation of a foreign subsidiary or simply the import or export of goods, it subsequently becomes subject to foreign exchange risk exposure. Foreign exchange risk exposure can be broken down into three categories for further development; these are real economic exposure, translation exposure, and transaction exposure.

The depth and breadth of the market for contingent claims, including exotic options, has expanded dramatically. Regulators have expressed concern regarding the risks of exotics to the financial system, due to the difficulty of hedging these instruments. Recent literature focuses on the difficulties in hedging exotic options, e.g., liquidity risk and other violations of the standard Black‐Scholes model. This article provides insight into hedging problems associated with exotic options: 1) hedging in discrete versus continuous time, 2) transaction costs, 3) stochastic volatility, and 4) non‐constant correlation. The author applies simulation analysis of these problems to a variety of exotics, including Asian options, barrier options, look‐back options, and quanto options.

In order to mitigate the effects of climate change, the UK government has set a target of achieving net zero greenhouse gas (GHG) emissions by 2050. Agricultural GHG emissions in 2017 were 45.6 million tonnes of carbon dioxide equivalent (CO₂e; 10% of UK total GHG emissions). Farmland hedgerows are a carbon sink, storing carbon in the vegetation and soils beneath them, and thus increasing hedgerow length by 40% has been proposed in the UK to help meet net zero targets. However, the full impact of this expansion on farm biodiversity is yet to be evaluated in a net zero context. This paper critically synthesises the literature on the biodiversity implications of hedgerow planting and management on arable farms in the UK as a rapid review with policy recommendations. Eight peer-reviewed articles were reviewed, with the overall scientific evidence suggesting a positive influence of hedgerow management on farmland biodiversity, particularly coppicing and hedgelaying, although other boundary features, e.g. field margins and green lanes, may be additive to net zero hedgerow policy as they often supported higher abundances and richness of species. Only one paper found hedgerow age effects on biodiversity, with no significant effects found. Key policy implications are that further research is required, particularly on the effect of hedgerow age on biodiversity, as well as mammalian and avian responses to hedgerow planting and management, in order to fully evaluate hedgerow expansion impacts on biodiversity.

This paper examines the zero‐cost risk reversal as a tool for increasing returns to excess yen while limiting risk. With domestic interest rates near zero, firms holding Japanese yen face little opportunity to deposit cash for meaningful gain unless excess funds are invested in an other currency. The conversion strategy is profitable as long as the value of the yen appreciates less than the interest rate differential between the currencies, taking advantage of an apparent empirical regularity frequently referred to as ‘forward exchange bias.’ A problem arises, however, because dollar‐yen exchange rate fluctuation adds variability to returns stated in yen. This increased risk counters prudent cash management principles such as stability of returns and liquidity. We consider the possi bility that effective use of a zero‐cost currency options collar can substantially limit exchange‐rate risk and improve returns to yen holders. Data from July 1997 through June 2002 show that a one‐year strategy of reinvesting collared monthly Eurodollar returns produced a median annual yen return of 1.76 per cent, more than 8 times the median 0.21 per cent Euroyen return; risk also increases but approximately 98 per cent of returns resulting from this strategy fell between ‐6.05 per cent and +12.58 per cent.