Race Is Socially Constructed free essay sample

Today race is thought of differently than it ever was before. With so many mixes out there it is almost impossible to guess a person’s race based solely on appearance. Race is not something we can see or even prove scientifically. In modern terms, â€Å"race is a socially constructed category composed of people who share biologically transmitted traits that members of society consider important. † (Farrell 2012). Which means race is something made up by humans to categorize people who share biological traits. In a scientific sense race cannot be proven or even real, however race is still very important. The idea of race is modern; people have not always been categorized in this way. â€Å"Ancient societies did not divide people according to physical differences, but according to religion, status, class, even language. † (web sight activity) Not until people started exploring and moving across seas did they distinguish differences among others and have a need for classification. We will write a custom essay sample on Race Is Socially Constructed or any similar topic specifically for you Do Not WasteYour Time HIRE WRITER Only 13.90 / page Over time and as immigration became popular there was more intermarriage, new races and ethnic groups. Today sociologist understand race as a social concept and not a biological fact. For example White Americans are able to choose and pass for what race and ethnic backgrounds they want to claim. The decision to claim Irish American, rather than Irish and French American depends on the situation. During St. Patrick’s Day one might claim to be Irish and not French because the French is irreverent to the situation. This person would be called an optional ethnic because their social situation makes it most convenient to be just Irish. Another example is when parents fill out their children’s census ancestry reports. â€Å"Only about 60 percent of the children of English-German marriages are labeled as English-German or German-English. About 15 percent of the children of these parents are simplified to just English, and another 15 percent are reported as just German. The remainder of the children are either not given an ancestry or are described as American. (pg 98 Optional Ethnicites Mary Waters 2004) This shows how easy it is for whites to pass for which ever race is more convenient and it has nothing to do with biology. On the other hand, a black person does not have this luxury. â€Å"In the United States, individuals who are actually â€Å"black† by the logic of hypo-descent have attempted to skirt the discriminatory barriers imposed by law and custom by attempting to â€Å" pass† for white. Ironically, these same individuals would not be able to pass for â€Å"black† in many Latin American societies. (pg 23 racial formations 2007 michael omi and Howard winant) Since there are so many ideas of black, someone who has even the slightest bit of black in them generally is seen as black and cannot pass for anything else. expand Countries and places all over the world view race differently, this is why race is socially constructed and cannot be proven scientifically. For example â€Å"in many Latin American countries, race is not a meta-concept based on biological categories but rather a classification dependent on time and context. â€Å"the determination and relative salience of race categories depend not on their â€Å"inherent† nature as physical characteristics but on the historical development of the context in which these categories are valued. Within this framework, the points of social reference in which a given individual operates are important determinants of racial identity. † (pg 59 rethinking the color line 2007 Charles gallagher) This Latin American idea of race coming from language, family history and upbringing pro ves race is socially constructed.

Abraham Isaac Essay Example

Abraham Isaac Essay Example Abraham Isaac Essay Abraham Isaac Essay In this classical piece of art. there is a connexion with the scriptural narrative of Abraham staying to God’s bid. Abraham is commanded to give his one and merely boy. Take your boy. your lone boy Isaac. whom you love. and travel to the land of Moriah. and offer him at that place as a burnt-offering on one of the mountains that I shall demo you. ( Genesis 22:1-2 ) And so the image depicts the last minutes of Abraham and his boy. where Abraham is about to do the greatest forfeit ; hence. God sends down an Angel to halt him and bless him afterwards for demoing great religion. Because you have done this. and have non withheld your boy. your lone boy. I will so bless you. and I will do your offspring every bit legion as the stars of Eden and as the sand that is on the seashore†¦ said the Lord ( Genesis 22:15 ) By analysing the picture. we can separate the characters and find the scene. harmonising with the narrative of Abraham giving Isaac. First. there are three of import characters in the picture that are drawn in great item. The first character we can place is Abraham who is in the centre of the image. where all the action is go oning. We can state that Abraham is the 1 who is keeping the knife in his dominant manus ready to do forfeit. with Isaac on the tabular array. The chief character Abraham. is have oning bright colourss of ruddy and violet. known to be royal colourss and revered. Abraham is besides clothed to the full from top to bottom demoing small tegument. The Angel in the background is have oning a bright white garment clothed from top to bottom. We can state that the Angel is reding Abraham because Abraham’s attending is towards this Angel. We know this is an angel who came down from heaven because of the white wings on its dorsum and how it is levitating from the land. And know that Isaac is on the tabular array because of how immature he looks and small he is clothed. I besides identified how guiltless they are by detecting the tegument tone in each character. Abraham is the darkest because of his life experience and approach of old age. the Angel has a mild tone after Abraham. and so there is Isaac who is palest of them all. I besides interpreted their degree of adulthood by the colour of their hair. Abraham being the oldest holding white hair. the Angel holding mild brown hair. and Isaac being the youngest with healthy dark. black hair. Looking at the place of the characters we can besides picture the hierarchy degrees in each character. Angel remains on the highest land. so Abraham. and so Isaac. I find it peculiarly interesting to happen the lamb being on higher evidences than Isaac. this could be to demo the importance of this animate being that is chosen to be sacrificed for God. Before Abraham is to do his forfeit. he kneels before the wooden communion table remaining close to his boy. We can pick up senses that the male parent has a loving relationship for his boy. There are besides emotions in these characters. Abraham exhibits unhappiness and concern in his facial look. Isaac has a helpless. sad look. where he knows his terminal will come by his ain father’s custodies. What I find diverting the most is that in this picture. Isaac may hold knew he was traveling to be the sacrificial lamb. I believe Isaac knew from the point when he asked his male parent where the lamb for burnt-offering was. I conclude that he knew of this because the manner he is tied up. Isaac is non tied up by the pess. nor is his custodies tied to the tabular array. If Isaac truly wanted to run off he could’ve easy done so. Alternatively Isaac accepted the fact that he was traveling to be sacrificed and so he did non fight. Next. the scenery helps us place the scene of the scriptural history on Abraham giving Isaac. The image background clearly identifies that the giving takes topographic point in a mountain. In the background there is big land below their lift observing how high this is taking topographic point. With the inside informations in the image we can state that the scene took topographic point in a dark fly-by-night country. This image besides exhibits the clip of season. around the clip of autumn because there are losing foliages on the subdivisions. On the right underside corner there is moss turning on stones. and moss merely grows in moist and fly-by-night countries. With the inside informations of the moss and dark colourss we can acquire a sense of dark ambiance of something is non right in the image. The location of the Sun and the angle of the shadow on the land below do non match with each other. The country where it’s brightest above the Angel’s finger can really stand for God or the Heavens above. The Sun should be more towards our left in forepart of the characters where the light radiances on the tree and the characters. Besides the subdivisions and the angle of this picture show that it is indicating to the West. I can merely reason that the ground to indicating to the West has to make something with the Sun lifting in the West and puting in the East. Even the Angel and the lamb are looking to the West while Abraham and Isaac is the lone 1 in the image looking to the East. In decision. I can theorize from the inside informations in the picture that it interprets the scriptural text of the Lord proving Abraham to give his ain boy. This painting exhibits a subject of fright. Abraham fears the Lord and so he chooses to prosecute God’s bid by free will. Isaac shows fear in his facial look but does non fight for his life.

The True Followers of Holy Christ Essay Example | Topics and Well Written Essays - 1250 words

The True Followers of Holy Christ - Essay Example Consequently, they could only be included in the religion through holy bath or baptism in order to associate them with their parents as the followers of Jesus Christ. Infant baptism, according to the American Catholic Organization, only makes sense if parents are true Christian disciples. If they are not, then it makes little sense to initiate their children into a Church which calls for a commitment to living the mission of Christ (2012). Baptism is conducted with the same religious fervor as the ancient Jews used to make arrangements for the execution of circumcision of the newly born boys in order to demonstrate their love and affiliation with the first patriarch Abraham (Diamont, 2005); the same is the case with baptism, which seeks its roots in the earliest Christian era, when the Church had maintained rigorous standards for the entry of non-Christians in the faith; consequently, the saints used to baptize the people embracing the faith, which used to be the sign of the grant of pardon from all the previous sins they had committed before converting to Christianity (Latourette 1975). In addition, baptism is also performed by repeating the ways of Jesus Christ, as New Testament manifestly reveals that Jesus was baptized himself by John (Luke 3:21; Matthew 3:16; Mark 1: 9-10). Later, the saints including Augustine of Hippo and others were also baptized at the eve of adopting the faith (Augustine 2011). Gradually, the tradition earned the status of an essential religious sacrament to be performed on all the newborn babies. Being the part of old tradition, which has become a sign and symbol of the adopting Christianity as faith, the Catholics still stick to the ritual of baptizing their young ones in order to demonstrate their unflinching belief in Jesus Christ as Savior on the one hand, and the source of spiritual guidance, and worldly and eternal bliss on the other. Thus, baptism has become an integral part of Christian faith, which is performed on infant bab ies and converts with great religious fervor and enthusiasm in all parts of the globe at large. PART II Baptism/ Initiation Rites in Christianity and Islam: Initiation in Christianity: While discussing the initial Catholic rites other than baptism, confirmation and Eucharist are also included in the list. The Sacraments of Initiation are the initial sacraments by which persons become members of the Catholic Faith (saintanne.org). All the three initiation rites are conducted equally on the young members of Christian faith as well as on the adult converts. Baptism is the bathing in a pool, tank, brook or river etc, which could be performed while standing, sitting, or kneeling in some water, where another Christian then lowers him under the water and then brings him back up out of the water, which is literally called immersion; the same word is found in the Bible (clarifyingchristianity.com). The same process is conducted on the infants with the help of their parents, while they take i n their arms or laps during the process. Like baptism, confirmation also maintains an important place in basic Sacraments. Baptism corresponds, according to Pope St. Leo, to our bodily birth, while confirmation corresponds to our bodily growth (Hardon 1998).

Health Care Reform Research Paper Example | Topics and Well Written Essays - 1250 words - 1

Health Care Reform - Research Paper Example It was in this context that new health care reforms were introduced. These reforms have given America's people, lots of rights and benefits regarding their health options but also have brought in some inconveniences along with that. The need for reforms Ten years back, around 45 million Americans were still outside insurance coverage (Garson). Kronenfeld and Kronenfeld have observed that â€Å"health care reform, or modification of the US health care system so that affordable, high-quality health care services are available to every one, is a public policy issue that has received discussion in the United States off an on since World War II† (1). One major criticism that arose from the period of George Bush’s Presidentship was that, â€Å"once the events of September 11, 2011, and the war with Iraq in 2003 led to a greater focus on international concerns and terrorism, the prominence of health care issues became fairly low† (Kronenfeld and Kronenfeld, 1). It was i n this backdrop that public demand arose for a health care reform. The 'Acts' The health reforms comprise of two bills (The Economist). Patient Protection and Affordability Care Act became was introduced and adopted in March 2010 (Healthcare.gov). The second has been a â€Å"reconciliation† act which was added to the reform package to compensate some of the pitfalls in the initial act (The Economist). This reform has been termed as the â€Å"biggest reform of health care in the country for 40 years† (BBC). This reform has also been hailed as an act to end â€Å"some of the worst abuses of the insurance industry† (Healthcare.gov). The government sponsored web site, Healthcare.gov, has also described this act in terms of its benefits to the citizens in the following words: These reforms will give Americans new rights and benefits, including helping more children get health coverage, ending lifetime and most annual limits on care, and giving patients access to reco mmended preventive services without cost-sharing. These reforms will apply to all new health plans, and to many existing health plans as they are renewed. Many other new benefits of the law have already taken effect, including rebate checks for seniors in the Medicare donut hole and tax credits for small businesses. Advantages This new law has also extended â€Å"the life of the Medicare Trust fund at least 12 years† thereby benefiting the senior citizens (Healthcare.gov). This is supposed to be brought about by â€Å"reducing waste, fraud and abuse, and slowing cost growth in Medicare† (Healthcare.gov). The expectation is that, â€Å"this will provide [the beneficiaries][†¦] with future cost savings on [†¦] premiums and coinsurance† (Healthcare.gov). One ambitious declaration made by President Barek Obama has been that medicare fraud will be reduced by â€Å"50 percent by 2012† (Healthcare.gov). Another major feature of this act has been that i t, â€Å"starting in 2014, the Affordable Care Act offers additional protections for Medicare Advantage Plan members by taking strong steps that limit the amount these plans spend on administrative costs, insurance company profits, and things other than health care†

Perspectives on Operations Management Essay Example | Topics and Well Written Essays - 1250 words

Perspectives on Operations Management - Essay Example An efficient operations strategy can help the business entities to win the race and stand at top of the crowd in competitive environment. Operations Strategies for new Wal-Mart store X Company is the chain of independent retail outlets in Hartwell in Essex and opening a new Wal-Mart store at edge of the town. The advice is needed about the potential operation strategy in response to the recent opening of Wal-Mart store. I have prepared a plan for the future business operation strategy for the new Wal-Mart store. There are some extracts of my research are mentioned below Operational Strategy According to many successful financial advisors, Operations strategy for any business has a direct impact on the profitability levels and corporate strategy. Structural design is the main element of the operations strategy. As the Company X is running its business as a retail outlet and want to set the new business operation strategy for new Wal-Mart store. There are some key points for the struct ural design of new operations strategy. Meet the target demand: As the company is opening its new Wal-Mart store at the edge of Essex. So the target customers are the people of Essex. In addition, the company can take advantage form the new customers because of the location of new Wal-Mart store. It is clear that, the company is going to meet with the high level of customer demand. In this case, the company need to ensure first that it have the capability to meet with the high level of demands. For this purpose, company should access the target demand level and take certain steps to meet with the target demand. Cost of the products: If the company want to win the competitive race, then it should set the prices of their products that are unbeatable. Management should set the prices that provide the good value for their products. Services: The management of the new Wal-Mart store should ensure to provide the high quality services to potential customer. The management should provide th e services according to the customers’ necessity. Use of Technology: In current modern trends, technology is referred as a primary toll for an efficient operations strategy. In the case of retail business technology can be used in effective manner to manage the day to day operations of the business. For example, use of security cameras to keep an eye on any unusual activity or use of bar code reader to track all the sales in efficient manner. Layout and design of new Wal-Mart store: The secret of efficient operations strategy for any retail business lies in the layout and design of retail outlet. That’s why the management of the new Wal-Mart store should set a catchy layout and design for its new store that will save the time of potential customers. The layout should be in such way that enables the customer to access all the necessary things easily. The management should set the service layout that can create an open shopping environment that helps the customers to fin d the things what they are looking for quickly. Selection of Employees: Selection of staff for new Wal-Mart store is one of the primary factors that can help to develop good operations strategy. Skilled and trained staff can help to manage the routine operations in more appropriate

Review of the literature on risk management

Review of the literature on risk management This chapter reviews the literature on the risk management and corporate governance in the banking sector. Part of the literature also attempts to provide a relationship between the independence and financial knowledge of the board of directors and audit committee, and risk management practices by referring to both empirical and analytical research. 2.1 Risk Management in the banking sector When discussing the challenges faced by financial institutions in managing risk, it is important to have a consistent definition of the term risk. Risk can be defined as the volatility of a corporations market value. Risk management involves the protection of a firms assets and profits. Moreover, not only does it provide profitability but also other advantages like being in line with obedience function toward the rule, increasing the firms reputation and opportunity to attract more customers in building their portfolio of fund resources. Cebenoyan and Strahan (2004) suggest that [à ¢Ã¢â€š ¬Ã‚ ¦] the benefits of advances in risk management in banking may be greater credit availability, rather than reduced risk in the banking system (p.19). This means that banks will have a greater opportunity to increase their productive assets and profit. Only those banks that have efficient risk management system will survive in the market in the long run. They can follow a four-step routine to red uce their risk exposures and achieve their risk management objectives, as shown below. Figure 1-Steps for implementing risk management To properly manage risks, banks must firstly identify and classify the sources from which risk may arise at both transaction and portfolio levels. Risks inherent in lending activities include market risk, liquidity risk, credit risk and operational risk. Market risk is the risk resulting from adverse movements in the level of market prices of equities, currencies, interest rate instruments and commodities. Banks are always facing the risk of losses in on and off-balance-sheet positions arising from undesirable market movements. Banks are inherently vulnerable to liquidity risk due to their fundamental role of transforming of short-term deposits into long-term loans. The FSA has defined liquidity risk as: The risk that a firm, though solvent, either does not have sufficient financial resources available to enable it to meet its obligations as they fall due, or can secure them only at an excessive cost. Another risk that banks face is credit risk. It is the risk that can be incurred if the counterparty fails to meet its obligations in a timely manner. Loans are the most palpable source of credit risk in many of the banking systems; however, other sources of this risk originate through other activities of banks such as acceptances, trade financing, interbank transactions, financial futures, foreign exchange transactions, swaps, equities, options, bonds, and in the extension of commitments and guarantees, and the settlement of transactions. Operational risk, as its name suggests, is a risk arising from execution of a companys business functions. The Basel Committee has defined operational risk as: the risk of losses resulting from inadequate or failed internal processes, people and systems, or external events, such as the failure of computer systems or error and fraud on the part of staff. Apart from those risks mentioned above, the Federal Reserve System has also recognised two other risks: legal risk and reputational risk. Legal risk is the risk of loss caused by sanctions or penalties originating from court disputes due to breach of contract and legal obligation. Another legal risk relates to regulatory risk, i.e., the risk of loss resulting from sanctions and penalties pronounced by a regulatory body. Reputational risk may be defined as the risk of loss caused by a negative impact on the market positioning of the bank. It can be seen as the blowing up of an initial loss, arising from credit, market, liquidity or operational risks. However, banks hardly pay attention to these categories of risks. Once identified, the risks should be evaluated to determine their impact on the companys profitability and capital. This entails measuring them by using various techniques ranging from simple to sophisticated ones. For example, market risk can be measured by using Value at Risk. This stage also calls for estimating three dimensions of each exposure: the potential frequency of losses that exposures have produced or may produce, the potential impact on the organisation if a loss should occur and the potential variation in losses that will occur during the exposure period. Accurate and timely measurement of risk is necessary because with these types of data the risk manager can determine which exposes are most serious and which deserve the most immediate attention. After measuring risk, bank managers should establish and communicate risk limits through policies, standards, and procedures that define responsibility and authority. These limits should serve as a means to control the risks associated with the banking institutions activities. There is a variety of mitigating tools that banks may employ to minimise the loss exposures. These tools may be diversification, securitization and even derivative such as withdrawal option, Bermudan-style return put option, return swap, return swaption and liquidity option. The final step involves appraising the operation of the program regularly to be sure that it is achieving planned results. It helps the managers to evaluate the wisdom of their decision-making. To efficiently monitor risk, all material risk exposures should be identified and measured again. To facilitate this procedure, banks should put in place an effective management information system (MIS) that will provide directors and senior managers with timely reports on the operating performance, financial condition and risk exposure of the firm. If corrective action is indicated at this stage, the first three steps should be repeated. 2.1 Corporate Governance in the banking sector Corporate governance is a term that is now universally invoked wherever business and finance are discussed. Its purpose is to coordinate a conflict of interest among all parties relationship within the company and to develop a system that can reduce or eliminate the agency problems arising from the separation of ownership and control (OECD, 1997). Agency problem occurs when the agents of an organization (e.g. management) use their power to satisfy their own interests rather than those of the principals (e.g. shareholders). It may also refer to simple disagreement between agents and principals. For example, the board of directors may disagree with shareholders on how to best invest the companys assets, especially when the board of directors wishes to invest in securities that would favour their interests. Not merely does the term corporate governance carries different interpretations, its analysis also involves diverse disciplines and approaches. One of the most quoted definitions of corporate governance is the one given by Shleifer and Vishny (1997): corporate governance deals with the ways in which suppliers of finance to corporations assures themselves of getting a return on their investment. The Cadbury Report, however, defined corporate governance as the system by which companies are directed and controlled (para 2.5). Additionally, it recognised that a system of good governance allows the board of directors to be free to drive their companies forward, but exercise that freedom within a framework of effective accountability (para 1.1). The Hampel Report, whilst accepting the Cadbury definition of corporate governance, also noted that the single overriding objective of companies is the preservation and the greatest practical enhancement over time of their shareholders investment ( para 1.16). In a similar vein, Charkham (1994) identified two basic principles of corporate governance: That management must be able to drive the enterprise forward free from undue constraint caused by government interference, fear of litigation, or fear of displacement. That this freedom- to use managerial power or patronage- must be exercised with a framework of effective accountability. Nominal accountability is not enough. In the banking sector, however, corporate governance differs greatly with other economic sectors in terms of broader extent of claimants the banks assets and funds. In manufacturing corporations, the issue is to maximise the shareholders value but in banking, the risk involved for depositors assumes greater importance due to the fact that almost every bit of banks investment are financed by the depositors funds. If it goes bankrupt, it will be depositors savings that the bank will lose. Indeed, Macey and OHara (2001) states that a broader view of corporate governance should be adopted in the case of banking institutions, arguing that because of the peculiar contractual form of banking, corporate governance mechanisms for banks should encapsulate depositors as well as shareholders. Arun and Turner (2003) also support this argument. Furthermore, the involvement of government in the banking sector is discernibly higher compared to other economic sectors due to the larger interests of th e public (Caprio and Levine, 2002; Levine, 2004). Rational depositors require some form of guarantee before depositing their wealth in banks. Yet, it is relatively difficult for banks to provide these guarantees to them because communicating the value of a banks loan portfolio is quite impossible and very costly to reveal. As a consequence of this asymmetric information problem, bank managers can have an incentive to invest in riskier assets than they promised they would ex ante. To assure depositors that they will not expropriate them, banks could make investments in brand-name or reputational capital (Klein, 1974; Gorton, 1994; Demetz et al, 1996; Bhattacharya et al, 1998), but these schemes give depositors little confidence, especially when contracts have a finite nature and discount rates are sufficiently high (Hickson and Turner, 2003). The opaqueness of banks also makes it very costly for depositors to constrain managerial discretion through debt covenants (Capiro and Levine, 2002, p.2). As such, government interventions provide the lacking assurance to economic agents in the form of deposit insurance. Nevertheless, although the government provides deposit insurance, bank managers still have an incentive to opportunistically increase their risk-taking, but now it is mainly at the governments expense. Apart from supporting the argument that a broader approach to corporate governance should be adapted to banking institutions, Arun and Turner (2003) also argue that government intervention do restrain the behaviour of bank management. The Bank for International Settlements (BIS) has defined the governance in banks as the methods and approaches used to manage banks through the board of directors and senior management which determine how to put the banks objectives, operation and protect the interests of shareholders and stakeholders with a commitment to act in accordance with existing laws and regulations and to achieve the protection of the interests of depositors. The Table 1 below shows the general principles concerning corporate governance issued by the Basel Committee specifically for bank boards and senior management. Principle 1 Board members should be qualified for their positions, have a clear understanding of their role in corporate governance and be able to exercise sound judgment about the affairs of the bank. Principle 2 The board of directors should approve and oversee the banks strategic objectives and corporate values that are communicated throughout the banking organisation. Principle 3 The board of directors should set and enforce clear lines of responsibility and accountability throughout the organisation. Principle 4 The board should ensure that there is appropriate oversight by senior management consistent with board policy. Principle 5 The board and senior management should effectively utilise the work conducted by the internal audit function, external auditors, and internal control functions. Principle 6 The board should ensure that compensation policies and practices are consistent with the banks corporate culture, long-term objectives and strategy, and control environment. Principle 7 The bank should be governed in a transparent manner. Principle 8 The board and senior management should understand the banks operational structure, including where the bank operates in jurisdictions, or through structures, that impede transparency (i.e. know-your-structure). Table 1- Principles of corporate governance for bank boards and senior management 2.2 Corporate Governance Mechanism According to agency theory, the corporate governance mechanisms reduce the agency problem between investors and management (Jensen and Meckling, 1976; Gillan, 2006). Traditionally, these mechanisms can be classified as internal and external. Llewellyn and Sinha, (2000) states that internal corporate governance is about mechanism for the accountability, monitoring, and control of a firms management with respect to the use of resources and risk taking. Its main mechanisms are the board of directors, the ownership structure of the firm and the internal control system (Gillan, 2006). Whereas, external corporate governance controls encompass the controls external stakeholders exercise over the organisation and its primary external mechanisms are the takeover market and the legal/regulatory system. However for the purpose of this paper, we will mainly focus on some internal corporate governance mechanism such as the board of directors, more precisely on its independence and financial knowledge. Corporate governance best practices have also stressed in particular the key role played by the audit committee in reviewing a firms internal control system. Internal control systems contribute to the protection of shareholders interests by providing reasonable assurance on the reliability of financial reporting, effectiveness of operations and compliance with laws and regulations (COSO, 1994; 2004). As such, we will also draw some attention on the audit committee. 2.3 The boards independence The popular media as well as corporate governance experts have characterised boards largely as rubber stamps for management. They are the link between the shareholders of the firm and the managers entrusted with undertaking the day-to-day operations of the organisation (Monks and Minow, 1995; Forbes and Milliken, 1999). As stated in principle 4 above, bank boards should properly supervise the work of managers. Which type of directors can perform better this duty than independent director? In fact, such directors can bring additional experience as well as clarity of thought to deliberations independent of views of management. Moreover, since their careers are not tied to the firms CEO, outside directors are believed to be more powerful in keeping efficiently the firms top management (Fama, 1980; Fama and Jensen, 1983) and so could be associated with better performance. Some papers do support this theory. Baysinger and Butler (1985), being among the first studies, find that the relative independence of boards has a positive effect on the firms average return on equity by comparing 266 major US businesses over a ten-years period. Kesner (1987); Weisbach (1988); Rosenstein and Wyatt (1990); Peace and Zahra (1992); Ezzamel and Watson (1993); MacAvoy and Millstein (1999); Brown and Caylor (2004) and Ho (2005) also show that shareholder returns are enhanced by having a greater proportion of outside directors on the board. Research by Brickley, Coles, and Terry (1994) shows significantly higher returns to firms announcing poison pill  [1]  when outside directors dominate the board. Other studies supporting the benefit of the boards independence are Dechow and Sloan (1996); Beasely (1996) and Klein (2002) who state that as outside membership on the board increases the likelihood of financial statement fraud decreases. There is also Black et al. (2006) who reports that firms with 50% outside directors have approximately 40% higher share price by studying 515 Korean firms. And more recently, Staikouras C. K., Staikouras P. K. and Agoraki M. K. (2006) find that the percentage of independent directors is positively related with performance measured by Tobins Q on a sample of European banks. On the other hand, others find no convincing evidence that the level of outside directors on the board do add value to corporate performance. For instance, Fosberg (1989) finds that firms whose board is composed of a majority of outside directors do not have a higher performance as measured by the firms ROE or sales. Similarly, Hermalin and Weisbach (1991) find that non-executive directors have no impact on corporate performance in their sample of 142 NYSE firms. Pearce (1983) also find no relationship, as too Changanti et al. (1985) in their study of board composition and bankruptcy. The lack of relation between these two components has also been confirmed by Klein (1998), Bhagat and Black (2002) and Hayes, Mehran and Scott (2004). Other scholars refuting the effectiveness of outside directors on the board are Subrahmanyam et al. (1997) and Harford (2000) for the acquisition transactions, Core et al. (1999) for CEO compensation and Agrawal and Chadha (2005) for earnings restatements . It is normally the board of directors which overviews and approves the risk management policies. But, few papers have tried to link its independence to the firms risk management practices and hedging. By analysing a sample of bank holding companies, Whidbee and Wohar (1999) find that the likelihood of using derivatives seem to increase with the presence of external directors on the board but only when insiders hold a large proportion of the firms shares. Borokhovich et al. (2004) demonstrate that firms most active in hedging risk, especially when making use of interest rate derivatives usage, are those whose boards are dominated by external directors. Conversely, Dionne and Triki (2004); Mardsen and Prevost (2005) point out that outside directors has no impact on the firms risk management policy. Given the mixed empirical findings, it is quite difficult to assert whether the board independence contribute to corporate performance and the effectiveness of risk management. Although Fields and Keys (2003) assert that there is overwhelming support for independent directors providing superior monitoring and advisory functions to the firm, a unique and clear sign concerning the effect of the boards independence on any decision including the risk management one could not be predicted. 2.4 The financial knowledge of the board To adequately perform their supervision role, the board of directors must have financial knowledge  [2]  . Indeed, when board members are generalists and lack the technical financial knowledge to understand the complicated reports presented to them, they could vote for motions that increase the risks facing of the firm to a large extent. The company may collapse in this way and therefore hinder the shareholders interest. Because of the banks dominant position in the economy; they should possess some financial expertise directors on its board so as to make better decisions that will not lead the firm to go bankrupt. However, given its importance, the research on the value of the boards financial knowledge is quite scarce. At times, reports recognising the benefits of the boards independence also recommend financial literacy/expertise for directors in monitoring the firms performance. In fact, Booth and Deli (1999) and Guner, Malmendier and Tate (2004) suggest that commercial bankers on boards provide the financial skill needed to enable the business to contract more debt. Thus, this states that financial directors do add value to the firm. There is also Agrawal and Chadha (2005) who discover that there is lower earnings restatement in firms whose boards have accounting or financially knowledgeable independent directors. However, Rosenstein and Wyatt (1990) provide evidence that positive abnormal returns associated with the addition of an outsider to the board are higher when the latter is an officer of a financial firm. Later on, Lee, Rosenstein and Wyatt (1999) do come to the same conclusion. However, they were unable to make any statistically difference among the reaction of the three categories of financial directors they consider: commercial bankers, insurance company officers and investment bankers. To the best of our knowledge, researches on the boards financial knowledge have only been related with the firms performance and not specifically on its impact on risk management practices. As mentioned earlier in this study, the board of directors is usually responsible for the firms risk management policies. In other words, risk management is at the core of any board members charter. Financially knowledgeable directors will obviously make better decisions on risk management practices since they will have the technical background to understand the sophisticated tools involved in risk management transactions. As such, firms whose boards are composed of financially knowledgeable directors engage more actively in risk management. 2.5 The audit committee The audit committee is intended to provide a link between the board and the auditor independent of the companys management, which is responsible for the accounting system (IOD, 1995). The chief objectives of an audit committee are to improve the quality of financial reporting, to reduce the potential authority for the non-executive director, to improve the channel of communication with the external auditor and, perhaps most importantly, to review the adequacy of the companys financial control systems. Tricker (1984) defines audit committee as being an important vehicle for ensuring the supervision and accountability at board level. As such, audit committees are very important in banking to safeguard the shareholders interest as well as the public trust. Just as for the board of directors, independence is also considered important for an audit committee because outside directors can exercise their voice and be seen to make a valuable contribution since they are free of any influence arising from the firms CEO. Thus, the reported empirical evidence supports this argument. Klein (2002) shows that independent audit committees reduce the likelihood of earnings management, thus improving transparency. In addition, Abbott, Park and Parker (2002) argue that firms with audit committees comprising entirely of independent directors are less likely to have fraudulent or misleading reporting. Ho (2005) states that there is a strong positive link between independent audit committee and corporate competitiveness and also with return on equity after analyzing the international companies from 1997to 1999. Brown and Caylor (2004) do provide evidence that audit committees comprising of independent directors are positively related to dividend but not t o operating performance. On the other hand, some authors find a negative relationship or simply no relation at all between independent audit committee and the firms performance. Hayes, Mehran and Scott (2004) prove that the firms performance measured by the market to book ratio is not affected by the proportion of outside directors sitting on the audit committee. Agrawal and Chadha (2005) do come to the same conclusion by indicating that independent audit committee members are unrelated to earnings restatement. There are also Beasley (1996) who finds no apparent correlation between audit committees composition and financial statement fraud, and Klein (1998) who reports no relation between share prices and the audit committees composition. Yet, Carcello and Neal (2000) report a negative relationship between the probability of receiving a going-concern report and the proportion of outsiders on the audit committee. In addition to independence, the accounting and financial expertise of members of the audit committee has also received widespread attention from the media and regulators  [3]  . An audit committee with such characteristics is expected to provide effective monitoring as it possesses the skills needed to understand what is going on in the organisation. Interestingly, Agrawal and Chadha (2005) show that firms whose audit committees have an outside director with accounting background or financial knowledge are less likely to report earnings restatement while Abbott, Parker and Peters (2002) discover that the absence of a financially competent director on the audit committee is highly associated with an increased in financial misstatement and financial fraud. Xie, Davidson, and DaDalt (2003) find that the presence of investment bankers on the audit committee decreases discretionary accruals in a firm. Davidson et al. (2004) and Defond, Hann and Hu (2004) show that the market has a po sitive reaction following the announcement of directors with accounting /auditing experience on audit committees board. The audit committee is also responsible for evaluating the risk exposures and the measures taken to monitor and control these exposures. To our knowledge no paper has tried to link audit committees composition with risk management practices. Because of the mixed and conflicting argument on independence, it is quite difficult for us to attest whether audit committees independence encourage more corporate hedging. Furthermore, risk evaluation and risk management tools are quite difficult to use and thus understanding them requires a good grasp of mathematics and statistics. As such, we expect firms whose audit committees members are qualified as accounting/financial expert to engage more actively in risk management practices. Besides independence and accounting/financial knowledge, the Cadbury Report has insisted that all listed companies should have an audit committee comprising of at least three members. This is to urge firms to devote significant director resources to their audit committees so that audit committees monitor the firms management more efficiently. However, several studies support the idea that larger boards can be dysfunctional since they may be plagued with free rider, communication problem and monitoring problems  [4]  . Therefore, as long as the increase in the audit committees size does not pose these types of problems, firms complying with this requirement are expected to report a higher hedging ratio. Often, corporations, especially financial ones, create another committee named risk monitoring committees. This type of committee is often responsible of the risk monitoring of the firm. However, this does not imply that audit committee is no longer responsible for evaluating and managing risks. It must still discuss and evaluate risk management processes. In other words, the audit committee is there to review risk management processes proposed by the risk management committee. As such, we assume that the same characteristics as the audit committee should be applied to this type of committee to fulfil their duties well.

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Romance is not Gone - I Promise!!! Click here for more Ads Like This One. I live in Decatur and I am divorced - after 22 years of marriage since June of last year. There was something missing and we just grew apart. A friend told me about this internet thingie and I tried it. Lets just say the jury is still out - have meet some very very strange people. My monk application is next to the computer LOL - I have come to the conclusion that the computer is an escape from reality for some - so please be very careful. This technology is great but there is nothing better that the spoken word - just two people talking and listening to each other. Guess I am a little old fashion :) I have two children - both not living at home - my daughter is 20 is currently in school at UA and is a Chemical Eng major. My son Chris, is 17 and lives with his mother and is still in high school - he will probably be there till he is 30 based on his grades. He is a typical boy - loves sports and girls and high school is where to socialize not study. I am very lucky - I have two great children and they are my life. I teach high school at a small school. This is my second career - I am retired from the military after 21 years. The Clinton drawdown was going on and it was time to leave. Didn't want to but was afraid that I would get a "pink slip" and didn't want to leave under those circumstances. So I had to decide what to do now that I was all grown up and had to find a real job. Teaching fit the bill. I teach both Special Ed and ROTC. I love my school kids to death - they keep me young -- to have got to stay one step ahead of them - but it is a pleasure to go to work each day. I am presently working on a certificate in administration and my EDS.degree. After that I am considering transferring to UA and finish my PhD there - would like a asst. principal or principal position. I enjoy anything outdoors - I am a very casual person - blue jeans and t-shirt.kinda of guy but I also like getting all dressed up (in my best coveralls :) - and going to a nice restaurant.