Embassy of the United States

Economic Affairs

Business Archive

THE CONFERENCE BOARD TASK FORCE ON EXECUTIVE COMPENSATION.
The Conference Board. September 21, 2009.
Full Text [PDF format, 40 pages]

The study shows recommendations for corporate institutions to restore credibility and increase trust in pay practices and oversight. A significant regulatory reform debate has begun, and while government has important responsibilities, the Task Force believes that public companies and institutional shareholders also have a role and should take meaningful action to restore the trust that has been lost during the economic crisis.

[Note: contains copyrighted material.]

FOREIGN DIRECT INVESTORS’ OUTLAYS TO ACQUIRE OR ESTABLISH U.S. BUSINESSES INCREASED IN 2008.
Bureau of Economic Analysis, U.S. Department of Commerce. June 4, 2009.
Full Text [HTML format, various paging]

Outlays by foreign direct investors to acquire or establish U.S. businesses increased 3 percent in 2008, to $260.4 billion. Outlays in 2008 were the third-largest on record and the sixth consecutive increase since a falloff in outlays in 2001-2002.

UNLOCKING CREDIT FOR SMALL BUSINESSES FACT SHEET.
U.S. Department of Treasury. March 16, 2009.
Full Text [HTML format, various paging]

The U.S. Department Treasury is taking immediate action to help ensure that credit, the lifeblood of America’s small businesses and its economy, gets flowing again to entrepreneurs and business owners. As another part of the Consumer and Business Lending Initiative, the Treasury Department will, by the end of the month, begin making direct purchases of securities backed by SBA loans to get the credit market moving again, and it will stand ready to purchase new securities to ensure that community banks and credit unions feel confident in extending new loans to local businesses.

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Wooldridge, Adrian GLOBAL HEROS: A SPECIAL REPORT ON ENTREPRENEURSHIP (Economist, March 14, 2009)
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Despite the economic downturn, entrepreneurship around the world is thriving, Wooldridge writes. In 1942, Joseph Schumpeter warned that bureaucratization was killing the entrepreneurial spirit; today, that spirit has gone mainstream, supported by political leaders of the left and right and reinforced by a growing infrastructure of universities and investors. Entrepreneurs carry economic weight because they generate new jobs. America continues to be the world's greatest producer of entrepreneurs; the world's two other large economies -- the European Union and Japan -- are far less entrepreneurial. America has the advantages of the world's most mature venture-capital industry and history of close ties between universities and industry. America's other advantage is its traditionally open immigration policy. However, India and China are creating millions of new entrepreneurs in part because they are able to translate Western ideas into local languages. The world is just beginning to feel the effect of the growth of entrepreneurs in these countries, Wooldridge says.

THE SMALL BUSINESS ECONOMY: A REPORT TO THE PRESIDENT.
U.S. Small Business Administration. February 2009.
Full Text [PDF format, 373 pages]

A better market for United States exports was the highlight of the fading economy of 2007, according the report. Small businesses, like other firms, faced growing challenges, as housing starts fell and energy prices increased. The report showcases new research by economists on the small business role in the economy, including exporting. New research focuses on small businesses in international trade, small business training and development, tax policy, and business creation, including startup activities and the launch of new ventures.

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Mauldin, John WHERE WILL THE GROWTH COME FROM? (Investors Insight, posted February 9, 2009)
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In a guest posting, financial-services executive Louis-Vincent Gave notes that multinational companies following a new business model should emerge with great success from the current economic turmoil. These companies have retained knowledge-intensive design and distribution tasks in-house while outsourcing low value-added manufacturing tasks to developing countries, have worked to create new products and new markets, and have piled up cash. This preparation should allow them to take advent age of the current dislocations in the global economy to increase their efficiencies even further. “Globalization is far from dead,” Gave says, “and the companies that are positioning themselves today to reap its rewards will be the winners of tomorrow.”

WHAT ARE THE DRIVING FORCES OF INTERNATIONAL BUSINESS CYCLES?
National Bureau of Economic Research. Mario J. Crucini et al. October 2008.
Full Text [PDF format, 41 pages]

The report examines the driving forces of G-7 business cycles. It decomposes national business cycles into common and nation-specific components using a dynamic factor model. The report finds a large common factor in oil prices, productivity, and the terms of trade. Productivity is the main driving force, with other drivers isolated to particular nations or sub-periods.

[Note: contains copyrighted material]

MARKETING FOOD TO CHILDREN AND ADOLESCENTS.
Federal Trade Commission. Web posted August 1, 2008.
Full Text [pdf format, 120 pages]

The report finds that 44 major food and beverage marketers spent $1.6 billion to promote their products to children under 12 and adolescents ages 12 to 17 in the United States in 2006. The food advertising to youth is dominated by integrated advertising campaigns that combine traditional media, such as television, with previously unmeasured forms of marketing, such as packaging, in-store advertising, sweepstakes, and Internet. These campaigns often involve cross-promotion with a new movie or popular television program. Analyzing the data, the report calls for all food companies “to adopt and adhere to meaningful, nutrition-based standards for marketing their products to children under 12.”

THE ENVIRONMENT FOR WOMEN’S ENTREPRENEURSHIP IN THE MIDDLE EAST AND NORTH AFRICA.
World Bank. Nadereh Chamlou. June 2008.
Full Text [pdf format, 90 pages]

The report presents how women entrepreneurs can contribute more to the quality and direction of economic and social development in the Middle East and North Africa region. Economic growth in the Middle East has been remarkable over the last four years, due mainly to higher oil prices. Rapid job growth has followed, driven mainly by the private sector. However, the region still faces challenges. The first is to create better jobs for an increasingly educated young workforce and the second is to diversify its economies away from the traditional sectors of agriculture, natural resources, construction, and public works and into sectors that can provide more and better jobs for young people.

[Note: contains copyrighted material]

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Naim, Moises THE COMING EUROINVASION (Foreign Policy, no. 166, May/June 2008, pp.96-95)
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European corporations are likely to follow European shoppers to the U.S. to snap up bargains, says Naim, the editor of Foreign Policy magazine. Those corporations are drawn not only by a cheaper dollar but also by cheaper labor, energy, transportation and land. European businesses can also take advantage of being close to clusters of U.S. high-tech companies and part of the largest market in the world. Several large investment and take-over deals in the manufacturing sector have already been announced. More are likely to follow, and other sectors such as banking. Midsize European firms will come even in greater numbers. This “Euroinvasion” is likely to produce political backlash on both sides of the Atlantic, Naim says. European politicians will denounce the companies for “exporting jobs” to America, while U.S. politicians will be incensed by “the foreign takeover of America.” But the author believes it will be impossible for politicians on either side to stop a trans-Atlantic shift. Blocking a few large investments by foreign government-owned funds and companies in U.S. ports, defense and other strategic industries is one thing, and preventing investments by thousands of private companies quite another.

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Hemp, Paul WHERE WILL WE FIND TOMORROW’S LEADERS? A CONVERSATION WITH LINDA A. HILL (Harvard Business Review, vol. 86, no. 1, January 2008, pp. 123-129)
Full text available from your nearest American Library

Corporations and other organizations need new leaders to deal with the increasingly global, diverse, interdependent and complex environment, says Linda Hill, a business administration professor at Harvard Business School. Companies need leaders who know and are from the emerging markets, where the fastest economic growth is occurring, but they also need a new type of leader who can adopt a more inclusive, collaborative style. Calling this model “leading from behind”, Hill argues that its followers must be able to create a context or culture in which other people are willing and able to lead. This doesn’t mean that new leaders abrogate responsibility; they still will need to nudge and prod if the “flock” strays too far off the track or into danger. Such potential leaders already exist in organizations, Hill says. But they often are “invisible”, or not considered for leadership roles, because they don’t fit the traditional leadership model developed in the U.S. and Western Europe. Instead, they need to be nurtured by today’s leaders, who can make space and provide opportunities for them to grow. Many situations, for example crises, will still require traditional, set-the-course, inspire-people type of leaders. But emphasis needs to be shifted toward the leading-from-behind model.

EDUCATION AND TECH ENTREPRENEURSHIP.
Ewing Marion Kauffman Foundation. Vivek Wadhwa et al. May 2008.
Full Text [pdf format, 16 pages]

The popular image of American tech entrepreneurs is that they come from elite universities. Some graduate and start companies in their garages, while others drop out of college to start their business careers. The dot-com boom reinforced the image of technology CEOs being young and brash. But, even though Bill Gates and Steve Jobs founded two of the world’s most successful companies, they are not representative of technology and engineering company founders. A larger proportion of tech founders are middle-aged, well- educated in business or technical disciplines, with degrees from a wide assortment of schools.

[Note: contains copyrighted material.]

HUMAN CAPITAL AND WOMEN'S BUSINESS OWNERSHIP.
U.S. Small Business Administration. Darrene Hackler et al. Web posted April 28, 2008.
Full Text [pdf format, 75 pages]

Self-employed women differ from their wage and salary earning counterparts in several human capital areas. The self-employed women tend to be older, are better educated, and have more managerial experience than wage and salary earners. “Human capital factors such as education and experience have long been known to have a positive correlation with entrepreneurship,” said Dr. Chad Moutray, Chief Economist for the Office of Advocacy.

ENTREPRENEURSHIP IN HIGHER EDUCATION, ESPECIALLY WITHIN NON-BUSINESS STUDIES.
Enterprise and Industry Directorate-General, European Commission. March 2008.
Full Text [pdf format, 69 pages]

The report stresses Europe’s need to stimulate the entrepreneurial mindsets, encourage creative business start-ups, and foster a culture that is friendlier to the growth of small and medium-sized enterprises. The benefits of entrepreneurship education can expand an individual’s ability to turn ideas into action and is therefore a key competence for all, helping young people to be more creative and self-confident in whatever they set out to accomplish.

[Note: Contains copyrighted material.]

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Salter, Chuck, et al. FAST 50: THE WORLD'S MOST INNOVATIVE COMPANIES (Fast Company, no. 123, March 2008, pp. 73-117)
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Writers from the magazine Fast Company identify 50 companies that are moving forward in innovative ways. Some companies are included on the list for their new patents granted this year, others for innovative management techniques, or new products brought to market. Tata made the list for trying to bring a $2500 car to India and GE for re-engineering the CF34 jet engine. Communications and computer firms are represented as well as niche retailers. Google is first on the list and the authors describe what makes Google is an innovative company through profiles of Google managers.

DOING BUSINESS IN 2008: COMPARING REGULATIONS IN 178 ECONOMIES—OVERVIEW.
Working Paper, World Bank. Web posted January 1, 2008.
Full Text [pdf format, 9 pages]

Eastern Europe and the former Soviet Union have now surpassed East Asia in the ease of doing business. This document outlines the results of the “Doing Business” project which has contributed to some 113 business-related reforms around the world.

[Note: Contains copyrighted material.]

IN THE NAME OF ENTREPRENEURSHIP? THE LOGIC AND EFFECTS OF SPECIAL REGULATORY TREATMENT FOR SMALL BUSINESS.
Susan M. Gates and Kristin J. Leuschner, editors. Kauffman-RAND Institute for Entrepreneurship Public Policy, RAND Corporation. Web posted December 11, 2007.
Full Text [pdf format, 369 pages]

Some regulations, rules, and government policies might burden small businesses and entrepreneurs; however, small businesses often receive special regulatory treatment or exemptions from these regulations. This report examines these regulations and policies in four key areas: health insurance, workplace safety, corporate governance, and business organization. The evidence suggests that the regulatory environment modifies the behavior of small businesses, but policies designed to help small businesses do not always have that intended effect.

[Note: Contains copyrighted material.]

BEYOND GREY PINSTRIPES: 2007-2008. Center for Business Education, The Aspen Institute. Web posted October 10, 2007.
Full Text [pdf format, 3 pages]

This survey ranks Masters in Business Administration programs, but “success” is defined as how well prepared graduates “are to guide a company through the complex relationship of business and society, where issues relating to the environment or the well-being of a community can impact a company’s performance and reputation.” The survey includes 40 thousand pages of data collected from 111 schools, of which 71 are U.S. institutions and 40 are international schools in 18 countries.

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Wolcott, Robert C.; Lippitz, Michael J. THE FOUR MODELS OF CORPORATE ENTREPRENEURSHIP (MIT Sloan Management Review, vol. 49, no. 1, Fall 2007, pp. 75-82)
Full text available from your nearest American Library

The authors, with the Kellogg School of Management at Northwestern University, studied close to 30 corporations to see how established organizations strive to create new businesses, also known as corporate entrepreneurship. The authors came up with four different models, ranging from the opportunist model, where the company has no deliberate approach but rely on grassroots efforts to the producer model, where a full service group has a mandate for corporate entrepreneurship established and supported by the company. Regardless of which model is chosen, the authors argue that corporate entrepreneurship needs to be nurtured and managed as a “strategic, deliberate act.”

BUSINESS LINKAGES: LESSONS, OPPORTUNITIES, AND CHALLENGES. Beth Jenkins, Anna Akhalkatsi, Brad Roberts, and Amanda Gardiner. International Finance Corporation (IFC), World Bank Group, and John F. Kennedy School of Government, Harvard University. Web posted July 26, 2007.
Full Text [pdf format, 64 pages]

This report reviews the practice of business linkages. The linkages program is an International Financial Corporation (ICF) initiative that helps local small businesses contract with IFC investment clients. 

This report explores the business linkage practices between large firms and small and medium size enterprises in developing countries. The report examined 21 case studies from leading companies and highlighted lessons learned.

WOMEN ENTREPRENEURS IN THE MIDDLE EAST AND NORTH AFRICA: CHARACTERISTICS, CONTRIBUTIONS AND CHALLENGES. Center of Arab Women for Training and Research and International Financial Corporation Gender Entrepreneurship Markets, International Financial Corporation. Web posted June 6, 2007.
Full Text [pdf format, 95 pages]

There is a growing recognition that women in business play an important role in their countries’ economies, and female entrepreneurship in the Middle East and North Africa (MENA) has been increasing over the past decade. Women-owned businesses are contributing to economic growth and creating employment for other women. However, women business owners report that they face a series of constraints when setting-up or expanding businesses. 

This report is collaboration between businesswomen’s associations and research institutions in five countries (Bahrain, Jordan, Lebanon, Tunisia and UAE). It is hoped that this report will serve as a catalyst for other countries to address the needs of women business owners.

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Detomasi, David Antony THE MULTINATIONAL CORPORATION AND GLOBAL GOVERNANCE: MODELLING GLOBAL PUBLIC POLICY NETWORKS (Journal of Business Ethics, vol. 71, no. 3, March 2007, pp. 321-334)
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Globalization has increased the trans-border economic power of multinational corporations (MNCs), giving rise to concerns about their social accountability. Who is to provide governance and enforce corporate social responsibility (CSR)? Several well-known actors – national governments, international organizations, NGOs and industry associations – try to keep MNCs in check, but all of them, taken separately, display serious weaknesses and limitations. The author, an assistant professor of international business at Queen’s University, Ontario, argues that the only governance entities capable of establishing and enforcing CRS standards globally are Global Public Policy Networks (GPPNs). In such informal networks “the strengths of state, market, and civil society actors combine to create an effective international governance system that overcomes the weaknesses afflicting each individually.” The author says that GPPNs, empowered by the common interests of their participants, already are beginning to emerge and engender a number of global corporate codes of conduct, such as OECD’s Guidelines for Multinational Enterprises or the United Nations Global Compact initiative. Unlike a state, the international system lacks centralized governing institutions, but is not bereft of governance – a set of rules and regulatory mechanisms that “function effectively even though they are not endowed with formal authority,” writes the author. In his view, emerging GPPNs are one example of how such governance can be instituted and successfully exercised in today’s globalized world.

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Byrnes, Nanette; Sasseen, Jane BOARD OF HARD KNOCKS (Business Week, No. 4018, January 22, 2007, p. 37)
Full text

As a result of the passage of the 2002 Sarbanes-Oxley Act, the authors look at how corporate board members are now facing “real financial liability in a smattering of lawsuits” following a spate of corporate scandals in recent years. Board members are paying more attention to CEO compensation, which includes providing a breakdown of all compensation given to executives, including, for the first time, severance and deferred pay. Additionally, corporate boards of directors are now required to justify their reasons for the amounts of CEO compensation they have set, as well as to oversee financial audits and conduct internal investigations. Due to time and energy spent on these details, they do not have much time on advising the CEOs. Nonetheless, these changes are seen by many as improving corporate boards.

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Fryer, Bronwyn. THE ETHICAL MIND: A CONVERSATION WITH PSYCHOLOGIST HOWARD GARDNER
(Harvard Business Review, vol. 85, no. 3, March 2007, pp. 51-56)
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It is more difficult for businesspeople than other professionals to adhere to moral standards because business, unlike medicine, law, or engineering, is not strictly speaking a profession with its own gradually established and peer-enforced rules, says Harvard psychologist Howard Gardner in an interview with Brownwyn Fryer from Harvard Business Review. Gardner advices young people who start their own businesses or go into the corporate world to periodically “inoculate” themselves by studying both positive and negative cases of other people’s behavior under stress, developing a network of trusted “counselors,” taking time to think of their larger goals and values, and be ready to pay the price. “If you are not prepared to resign or be fired for what you believe in, then you are not a worker, let alone a professional. You are a slave,” Gardner tells future business leaders.

REPORT ON THE REGULATORY FLEXIBILITY ACT FY 2006: ANNUAL REPORT OF THE CHIEF COUNSEL FOR ADVOCACY ON IMPLEMENTATION OF THE REGULATORY FLEXIBILITY ACT AND EXECUTIVE ORDER 13272.
Thomas M. Sullivan, Chief Counsel for Advocacy. Office of Advocacy, U.S. Small Business Administration. February 2007.
Full Text [pdf format, 77 pages]

The Regulatory Flexibility Act (RFA) requires federal agencies “to review the potential impact of proposed regulations on small businesses and other small entities and to examine significant alternatives that minimize small entity impacts while still meeting the purpose of the regulation.” This annual report from the Small Business Administration measures the success of RFA during 2006.

THE NET NEUTRALITY DEBATE: TWENTY FIVE YEARS AFTER UNITED STATES V. AT&T AND 120 YEARS AFTER THE ACT TO REGULATE COMMERCE.
Bruce M. Owen. Working Paper, AEI-Brookings Joint Center for Regulatory Studies, American Enterprise Institution and The Brookings Institution. February 2007.
Full Text [pdf format, 12 pages]

“Net neutrality is a slogan that stands for the proposition that the Internet and physical means of access to it should be available to all on uniform, non-discriminatory terms.” Proponents of net neutrality fear that access will be monopolized and that once successfully monopolized, services will be excluded to some. This paper presents an overview of agencies’ policies that regulate prices and economic interests and provides a historical view of monopoly power and anticompetitive behavior.

IS THE WORLD FLAT? OR DO COUNTRIES STILL MATTER?
Alberto Chong and Mark Gradstein. Research Department Working Paper 584, Inter-American Development Bank. November 2006.
Full Text [pdf format, 31 pages]

“This paper revisits the effects of a country’s institutional framework on individual firms’ behavior. . .” Contrary to popular belief that differences across countries no longer matter, the authors’ conclusion (after building a dataset based on thousands of firms across dozens of countries) is that countries still matter in providing institutional infrastructure which determines how firms operate.

A MODEL OF CORPORATE PHILANTHROPY. Ray Fisman, Geoffrey Heal, and Vinay B. Nair. Wharton School, University of Pennsylvania. Web posted January 11, 2007.
Full Text [pdf format, 23 pages]

“Our separating equilibrium is built on the assumption that entrepreneurs can be of two types—they are either purely profit motivated or they care about both profits and the externalities they impose. This difference in entrepreneurs’ preferences makes corporate philanthropy more expensive for profit-maximizing entrepreneurs than it is for ‘socially-minded’ entrepreneurs, who gain some warm glow from charity.” The authors’ preliminary tests support the framework that “corporate philanthropy and profits are positively related only in industries with high advertising intensity and high competition.”

AMERICA’S NEW IMMIGRANT ENTREPRENEURS. Master of Engineering Management Program, Duke University and School of Information, U.C. Berkeley. Web posted January 4, 2007.
Full Text [pdf format, 41 pages]

This research documents the economic and intellectual contribution of immigrants in technology and engineering at a national level. The study looked at a large sample of engineering and technology companies founded in the last ten years. The key characteristics of these companies are as follows:

• At least one of the founders is foreign-born in 25.3% of these companies;
• Immigrant-founded companies produce $52 billion in sales and employ 450,000 workers;
• Companies found by Indians have been concentrated in the engineering and technology sectors in the past 10 years;
• Chinese entrepreneurs are concentrated in California; Indian entrepreneurs have a sizable concentration in California and New Jersey; and the British are centered in California and Georgia;
• 80% of the immigrant-founded companies are in software and innovation/manufacturing-related services; and
• Immigrants were least likely to start companies in defense/aerospace and environmental fields.

The authors concluded that immigration is a driving force in the creation of new businesses in the U.S.

THE STATE OF [HIV/AIDS] BUSINESS COALITIONS IN SUB-SAHARAN AFRICA.
Francesca Boldrini and Chris Trimble. World Economic Forum. September 2006; Web-posted November 1, 2006.
Full report [pdf format, 36 pages]

This report illustrates how 27 countries are creating and supporting coalitions with businesses to address HIV/AIDS. At least 20 coalitions exist in sub-Saharan Africa today, with more than 16 having been established in the last five years, as demands for these programs have grown. The study provides guidance to new coalitions and those soon to be formed; shares best practices; benefits; achievements; and highlights key challenges facing coalitions.

Most of the coalitions spend the largest proportion of their time and effort supporting company action to combat HIV/AIDS in the workplace. Such efforts range from developing country-specific toolkits to implementing tailored employee training programs. One major question mark is the financial sustainability of coalitions. One of the most important challenges reported by coalitions is the heavy reliance on unpredictable funding. The report recommends that all stakeholders - business coalitions, businesses and international partners - work together to clarify the long-term vision of coalitions and understand what priority actions are required to make it work.

There are separate country profiles

on the coalitions in Botswana, Cameroon, Cote d'Ivoire, Democratic Republic of the Congo, Ethiopia, Ghana, Kenya, Malawi, Mali, Mauritania, Namibia, Nigeria, Rwanda, Swaziland, Tanzania, Uganda, Zambia and Zimbabwe.

BRIBE Payers Index (BPI) 2006.
Transparency International (TI). October 4, 2006.
Full report [pdf format, 16 pages]

The Bribe Payers Index (BPI) rates the propensity of companies from 30 leading exporting countries to bribe government and business officials abroad in order to secure better business arrangements. Companies from the wealthiest countries generally rank in the top half of the Index, but they still routinely pay bribes, particularly when doing business in developing economies. Companies from emerging export powers (India, China and Russia) rank among the worst. In the case of China and other emerging export powers, efforts to strengthen domestic anti-corruption activities have failed to extend to its foreign operations.

For each of the 30 countries ranked, the Index notes whether it is a signatory to the United Nations Convention against Corruption (UNCAC) and/or to the OECD Convention on Bribery of Foreign Public Officials in International Business Transactions.

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EMERGING GIANTS: BUILDING WORLD-CLASS COMPANIES IN DEVELOPING COUNTRIES
Khanna, Tarun; Palepu, Krishna. (Harvard Business Review, vol. 84, no. 10, October 2006, pp. 60-69)
Full text available from your nearest American Library

Khanna and Palepu, both of the Harvard Business School, say companies in emerging companies can compete successfully, both at home and abroad. Their six-year study of local companies that succeeded against the onslaught of multinational corporations revealed three primary strategies. Some capitalized on their knowledge of local product markets; some exploited their knowledge of local talent and capital markets; and others exploited institutional voids to create profitable businesses. The authors provide real world examples of the successful implementation of these strategies.

BROADENING THE HORIZONS FOR RESPONSIBLE INVESTMENT: AN ANALYSIS OF 50 EMERGING MARKET COMPANIES
David Tozer. Ethical Investment Research Services. September 6, 2006
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"ERIS conducted a study of 50 major emerging market companies to assess what opportunities exist for responsible investors. It found that the majority of companies in the study have shown evidence of addressing at least some environmental, social and governance issues in their public disclosures, with some significantly so. South Africa appears to be notably ahead of other emerging markets in disclosing corporate social responsibility..."
[Extract from Executive Summary]

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Pulley, Brett et al. FROM THE FIELDS, TO THE FACTORY, TO THE CEO'S DESK, AFRICAN AMERICA PIONEERS IN CORPORATE AMERICA
(American Legacy, special "Trailblazers" issue, Summer 2006, pp. 10-26)
Full text available from your nearest American Library

This special supplement to American Legacy magazine, begins with the story of Richard D. Parsons, the head of Time Warner, Inc. and discusses the lives of the Afro-American trailblazers who went before him. William Perry, who helped Henry Ford get his start by helping Ford saw trees on Ford's wooded land and convert it into useful property. Later, when Perry developed a heart ailment, he asked Ford if he could find him a job that required little physical exertion. He became a machine inspector, and in 1914, was likely the first black person to fill a skilled job in corporate America. Also in 1914, Ford hired an Afro-American college graduate as a supervisor; word spread and many Afro-Americans migrated north to Detroit. In 1971 Otis Smith became General Motor's first African-American corporate officer and served as vice-president and general counsel. In 1953 the National Association of Market Developers, Inc. was formed to target ethnic markets. The year 1962 saw Harvey C. Russell become vice president of corporate planning at Pepsi. The series of articles in this supplement discusses the men and women who will take us into the twenty-first century, and is a "must read" for anyone interested in the Black contribution to the American corporate world.

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Carney, William J. THE COSTS OF BEING PUBLIC AFTER SARBANES-OXLEY: THE IRONY OF "GOING PRIVATE"
(Emory Law Journal, vol. 55, no. 1, 2006, pp. 141-160)
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The author notes that the enactment of the Sarbanes-Oxley Act (SOX) in 2002 may be the act that took the regulation of corporate disclosure to the point where costs of compliance will clearly exceed its benefits for many corporations. He considers whether regulation has gone too far -- forcing honest businesses to consider abandoning public markets for less regulated private markets. He notes that returns on investment need to be considered for spending on fraud prevention. He argues that SOX will not prevent all -- or even most -- financial fraud. SOX creates more stringent accounting controls, he explains, but they do not really add new protections against the fraud committed by companies like Enron and WorldCom -- whose actions were already illegal. Carney analyzes the costs of compliance with SOX and shows an increasing number of public companies going private.

GUIDANCE ON GOOD PRACTICES IN CORPORATE GOVERNANCE DISCLOSURE.
United Nations Conference on Trade and Development (UNCTAD). June 13, 2006.
Download [pdf format, 53 pages]

The purpose of this publication is to guide corporate entities in preparing reports that include disclosures on corporate governance, that address the major concerns of investors and other stakeholders. There are two main audiences for this guidance:

1. Enterprises eager to attract investment regardless of their legal form or size.
2. Policy makers and companies that do not adhere to international good practices and consequently fail to satisfy investor expectations on corporate governance disclosures.

The report focuses on two widely applicable disclosure issues relevant to most enterprises:

• Financial and non-financial corporate governance disclosures.
• Disclosure issues regarding general meetings, timing and means of disclosure, and compliance with good practices.

[Note: Material in this publication may be freely quoted or reprinted, but acknowledgement is requested, together with a reference to the document symbol -- UNCTAD/ITE/TEB/2006/3.]

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Terry-Azios, Diana A. SMALL BUSINESS, BIG RETURNS (Agenda, Summer 2006, pp. 22-26)
Full text available from your nearest American Library

With a growth rate of 82 percent since 1997, Hispanic-owned businesses are among the fastest-growing in the United States. Hispanic women actually lead that growth: approximately 35 percent of Hispanic firms are owned by women. And the momentum isn't slowing, according to a U.S. Internal Revenue Service report, which predicts that by 2007, Hispanics will own one of every 10 small businesses. If the prospect of owning a business is intimidating to some, nevertheless, others find that business ownership opens many doors for them. If the future of the Hispanic community's well-being depends on the future of its business development, it appears that the outlook is positive.

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Assadourian, Erik. NEXT STEPS FOR THE BUSINESS COMMUNITY
(World Watch, Vol. 19, No. 2, March/April 2006, pp. 16-20)
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As the last in the series on "The Evolving Corporation", the author examines how corporations are changing their behaviors and strategies regarding social responsibility. Some efforts are cosmetic, but some have resulted in real change while attempting to become not just eco-efficient, but "eco-effective". The eco-effective movement acknowledges environmental constraints and then redesigns goods and processes to follow the laws of nature. A few innovative companies are already on that path and some have worked with The Natural Step organization to implement more sustainable operations. Shareholders and organizations such at The Center for Political Accountability have pressured corporations to act in socially responsible ways, but there continues to be inconsistencies between corporate lobbying efforts and publicly stated goals. Less than 10 percent of the biggest companies are transparent in their lobbying and political expenditures, but some trailblazers in corporate responsibility have been more open and willing to improve. However, without a reward system, it is unlikely that many of the 69,000 transnational corporations will undertake the next steps required for a sustainable future.

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Greenfield, Kent. DEMOCRACY AND THE DOMINANCE OF DELAWARE IN CORPORATE LAW (Law and Contemporary Problems, vol. 67, no. 4, Autumn 2004, pp. 135-146)
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The author, professor at Boston College Law School, notes that the state of Delaware, though it has only one-third of one percent of the nation's population, is the state of incorporation of over fifty percent of U.S. public companies. Greenfield writes that Delaware's staggering dominance in the field of corporate governance has been the subject of heated debate in academic circles for years -- whether it is a "'race to the bottom', a legal regime that benefits managers at the expense of the shareholders, or a 'race to the top' -- toward an efficient, shareholder-centric governance". He believes that this argument is beside the point, and that Delaware's influence in the field of corporate governance is illegitimate -- it depends on the so-called "internal affairs" doctrine, which states that the rules governing the internal affairs of a corporation originate from the state in which the corporation is chartered. However, because corporations affect so many stakeholders outside of Delaware, it is impossible to claim that internal affairs apply only to shareholders and managers. Greenfield argues that this ability of corporations to choose their governance law is undemocratic and inefficient, and believes that there may be grounds for federalization of incorporation laws.

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Lorsch, Jay W.; Zelleke, Andy. SHOULD THE CEO BE THE CHAIRMAN? (MIT Sloan Management Review, Vol. 46, No. 2, Winter 2005, pp. 71-74.)
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Recent U.S. corporate scandals have shaken people out of their complacency regarding corporate governance, write Lorsch and Zelleke, but a knee-jerk reaction to adopt the British model of company leadership -- which separates the CEO from the chairman of the board -- without understanding its complexities is not the answer. The British model can lead to confusion about who is really in charge and power struggles, they say. Conversely, the authors explain, the U.S. model -- in which the CEO is also the chairman -- precludes any confusion as to who is really in charge. There are pros and cons to each model, they note, but for most large U.S. companies, adding a competent lead director to the board -- with clearly defined limited responsibilities -- will likely strike the right balance between effective governance and leadership. Boards that do choose to split the chairman and CEO jobs should not ignore lessons from the U.K. experiences, they write. Lorsch and Zelleke are from Harvard Business School and Wharton School of Business, respectively.

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Parsons, Kelli COMMUNICATING GOOD GOVERNANCE TODAY (Public Relations Strategist, Vol. 11, No. 1, Winter 2005, pp. 6-9)
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Parsons, corporate practice director for public relations firm Hill & Knowlton, says that ethical leadership and honest communications protect a company's most prized possession -- its credibility. The author's firm's annual global survey of senior executives, Corporate Reputation Watch, reflects a measurable shift in the mind-set of senior management worldwide, she writes. For example, executives identified management team reputations as the single most important non-financial factor of company reputation. Seventeen percent regarded transparency and strong governance as the most important factor; most believed that issues of investor confidence and trust following a few highly publicized corporate scandals are the factors driving corporate governance reforms. Parsons emphasizes that advertising the actions a company takes -- such as strengthening governance and stewardship, philanthropic activities, and other things that positively impact the community -- will build trust and increase stakeholder confidence.

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Szegedy-Maszak, Marianne MYSTERIES OF THE MIND: YOUR UNCONSCIOUS IS MAKING YOUR EVERYDAY DECISIONS (U.S. News and World Report, February 28, 2005, pp 53-61)
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The study of the unconscious, once the purview of Freudian psychoanalysts, has been brought into the twentieth century by neuroscientists. A February article in Neurology imaged the brains of two minimally conscious patients and found that when family members or friends reminisced about events that were relevant to them, their brain-wave activity was similar to those who are conscious. Gerald Zaltman, Professor Emeritus from Harvard Business School and founding partner in Olson Zaltman Associates, a consulting firm that provides guidance to businesses seeking to better understand the minds of consumers, uses this kind of information to find out what excites people and what makes them comfortable. This kind of information can be used to design a whole range of items, from company logos to a children's' hospital.

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Crook, Clive THE GOOD COMPANY: A SURVEY OF CORPORATE SOCIAL RESPONSIBILITY (The Economist, Vol. 374, No. 8409, January 22, 2005, special insert)
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Over the past 10 years corporate social responsibility (CSR) has bloomed as an idea, if not a practical program, says Crook, deputy editor of The Economist. At one end of CSR are corporate policies that any well-run company should have in place, such as not lying to employees, not paying bribes, and looking ahead further than the next few weeks. At the other end are more ambitious policies related to giving large amounts of money to charities and spending on environmental protection beyond what regulators demand. He points to the World Bank, United Nations and Organization for Economic Cooperation and Development as being especially keen on CSR. Yet, the author argues, the best CSR policies raise both profits and social welfare, adding that corporate philanthropy really isn't charity if it comes at the expense of the firm's owners or shareholders. Robin Hood, who stole from the rich to give to the poor, "might have been a good corporate citizen, but he was still a bandit," he says. The proper guardians of the public interest remain governments, which are accountable to all citizens, he says. CSR cannot be a substitute for wise policies in areas such as taxes, spending, and regulation of various aspects of business activity, he argues.

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Tuna, Irem. PLAYING THE NUMBERS; WHY CORPORATE GOVERNANCE RATINGS DON'T MATTER (D & O Advisor, Vol. 3, No. 39, January 2005)
Full text available from your nearest American Library

The author evaluates claims made by a variety of consulting firms that good corporate governance characteristics, as measured by their quantitative ratings, are associated with company valuation and better managerial decisions. Tuna says that the evidence doesn't support these claims; governance ratings failed to predict which firms would engage in accounting manipulations, pay their executives extravagant compensation or engage in other, similar behavior inconsistent with shareholders' objectives. Consequently, the author argues that before a company's directors and officers begin revamping "inadequate" governance practices they should make sure that the costly change is likely to lead to a substantial improvement in managerial decision-making and company value. It is extremely difficult to make such an assessment based on corporate governance ratings, Tuna says.

BUSINESS AND HIV/AIDS: COMMITMENT AND ACTION?
World Economic Forum, Global Health Initiative; UNAIDS. January 20, 2005.
Full Report [pdf format, 59 pages]

Executive Summary [pdf format, 8 pages]

Businesses rarely draw up written policies to tackle HIV/AIDS until 20% of the country's population is infected, according to this global survey on the impact of that disease on business. Despite the fact that 14,000 people contract HIV/AIDS every day, concern among businesses has dropped by 23% in the last 12 months, with most companies (71%) having no policies in place to address the disease. Over 65% of the business leaders surveyed could not say or estimate the prevalence of HIV within their own workforce. Across sub-Saharan Africa, even in countries with an HIV prevalence of 10-19%, only around 7% of companies have formal HIV/AIDS policies in place. The gap between prevalence and policies may be greatest in China, Ethiopia, India, Nigeria and Russia, the so-called "next wave" countries, which are predicted to experience the highest numbers of new HIV/AIDS cases worldwide by 2010.

The report concludes with recommendations that businesses need to better understand their risk exposure and learn to manage them from local good practices. A key priority in both high and low-prevalence settings, say the authors, is to establish a policy based on non-discrimination and confidentiality.

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Berenbeim, Ronald. CORPORATE GOVERNANCE Vital Speeches of the Day, Vol. 71 No. 3, November 2004, pp. 87-89
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Berenbeim, Director of Global Business Ethics Programs, The Conference Board, says the outlook for improved business ethics in governance depends in large measure on understanding institutional and human limitations. He asserts that the lesson of the last decade is that institutional and human vigilance -- regardless of the laws on the books and directors' reputations for honesty and experience -- all but vanishes when markets go through periods of consistent rise. The market -- rather than new laws or special commissions -- is the most effective factor in behavior modification when directors and executives have found it convenient to ignore the limits imposed by sound financial and business practice, he says. However, since the market punished the guilty and the innocent equally, he proposes several measures to improve corporate governance including greater board involvement in company ethics and requiring companies to insure their financial statements.

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Bishop, Matthew. THE NEW KINGS OF CAPITALISM: A SURVEY OF PRIVATE EQUITY
Economist, Vol. 373, no. 8403, November 27, 2004, special insert
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Private equity has become the new king of capitalism, with many well-known corporate names now owned by private equity firms, such as retailer K-Mart, which recently merged with Sears. Private equity firms are those that purchase other firms or take big stakes in them in order to reshape their businesses, then sell the holdings for a profit. The private equity model is in some ways superior to that of publicly-traded firms as it often seems to provide better corporate governance, says author Matthew Bishop. Additionally, private equity firms are increasingly helping companies maximize their long-term value by protecting them from stock market pressure. Bishop questions whether private equity firms using their power wisely -- growing amounts of pension fund money is being invested in private equity funds and the beneficiaries have the right to know how their savings are being used. The challenge for private equity firms is to meet this legitimate demand without disclosing commercially useful information. The author points out that private equity firms have experienced a wide variance of success. He warns of a danger that perhaps too much money is flowing into private equity, creating a bubble that may result in the funds' losing "edge." If that happens, he writes, capitalism may need to crown a new king.