Security (finance)

• But since the 1980s, the UK has made it a priority to throw a lifeline to struggling companies.
• It appears, however, that these efforts to enhance the law are being hampered by sloppy language in the media, increasing the stigma around insolvency and potentially deterring businesses from seeking help.
• So what is the correct language to use when we’re discussing insolvency?

Corporate insolvency law

• They are found in the Insolvency Act 1986 (liquidation, administration, company voluntary arrangements (CVAs) and standalone moratoriums) and in the Companies Act 2006 (schemes of arrangement and restructuring plans).
• The liquidator then distributes the value of the assets among the creditors of the company in a ranked order, known as the “insolvency waterfall”.
• It is a voluntary arrangement between the company and its creditors, supervised and approved by an insolvency practitioner (that is, someone who is licensed to act on behalf of an insolvent company).
• For example, after calling in administrators earlier this year, The Body Shop is now thought to be seeking a CVA.

• Directors are given 20 business days to assess their rescue and recovery options.
• The scheme of arrangement, regulated by the Companies Act 2006, is a procedure available to companies that are not yet insolvent.
• Think of it as something akin to an individual consolidating their credit cards, or arranging a plan to repay arrears.

The reality of corporate insolvency

• Clearly, the legislative priority in the UK over the past 40 years has been to promote corporate rescue and renewal.
• This should, in principle, be particularly useful to British businesses at a time when the UK has seen a record number of business failures, with no fewer than 26,595 corporate insolvencies in 2023.
• That figure is 14% higher than in 2022 and 43% higher than pre-pandemic levels in 2019.
• With an increasing number of companies in financial difficulty, we might have expected that corporate rescue cases would have risen too.

The authors do not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and have disclosed no relevant affiliations beyond their academic appointment.

• Stock market development and familiarity (language and distance) are considered key determinants for home bias.
• The literature neglects however that investors often invest in foreign funds domiciled in financial centers.

• Beauty is not, as it is often assumed to be, “in the eye of the beholder” – but follows certain predictable rules.
• The fascination for the perfect makeup or skincare is fired up by the impact of perfect faces displayed on social media and enhanced by image processing and filters.

Pretty privilege

• Numerous studies have shown that attractive individuals benefit from a beauty bonus and earn higher salaries on average.
• Beautiful individuals are consistently expected to be more intelligent and thought to be better leaders, which influences career trajectories and opportunities.

Does being attractive make you more trustworthy?

• In our recent paper Adam Zylbersztejn, Zakaria Babutsidze, Nobuyuki Hanaki and I set out to find out.
• Previous studies presented different portraits of individuals to observers and asked them about their beliefs about these people.
• Each player’s payoff thus depended on their own actions and/or the actions of the other player:

If player A chooses “Left”, then regardless of player Bs’ choice:
If player A chooses “Right” and player B chooses “Don’t roll”:
If player A chooses “Right” and player B chooses “Roll”:

• To do so they were presented with the abstract choice scenario explained above while individually sat in a cubicle.
• If they decided not to trust, they were sure to receive a meagre 5-euro payout for their participation in the study.
• However, once an A player decided to trust their B partner, their fate was in the B player’s hands.

Does gender come into play?

• This implies that in our abstract economic exchange, beautiful individuals are more likely to benefit from the trust of others.
• However, when investigating actual behaviour, we see that beautiful individuals are neither more nor less trustworthy than anyone else.
• In other words, trustworthiness is driven by good old individual values and personality, which are not correlated with how someone looks.

Are beautiful people more suspicious of their peers?

• However, we might wonder who is more likely to fall prey to this bias.
• We constructed our study such that we could also investigate this question.
• Specifically, the participants we recruited in Lyon to make their predictions also had their photos taken.
• We thus knew how much they were influenced by the looks of others but also how conventionally good-looking they were themselves.

Astrid Hopfensitz ne travaille pas, ne conseille pas, ne possède pas de parts, ne reçoit pas de fonds d'une organisation qui pourrait tirer profit de cet article, et n'a déclaré aucune autre affiliation que son organisme de recherche.