1. Proactive Structural Dynamic Futures, Derivatives Pricing for Corporate Governance Operations Simulation Analysis, Early Warning, Prevention by Fenglan Zhang and Warren Huang Discussed by: Xueping Wu City University of Hong Kong

2. The Scope of the Paper This paper demonstrates why, what and how to use the “proactive structural dynamic simulators” to track and prevent financial crisis and corporate scandals.

3. Why Proactive Structural Dynamic Simulation? Tracking financial crisis and scandal behavior cycle for early warning and prevention. –The root causes of global corporate accounting scandals are due to the greedy CEO aimed at boosting their salary and bonus. –e.g., China Guangxia excessively speculates over biotech merger. Enron uses off balance sheet derivatives trading to push the stock prices.

4. What are the Major Areas of Simulators? These simulators cover a broad perspective and include: –Monetary policy impact on global banking, financial crisis, corporate scandals and behavior cycles. –Global economic, business cycle boom and bust. –Onset of China, Taiwan, US and Euro currency crisis and corporate scandal. –Global stock market crash crisis and scandals dynamics.

5. How are the Simulators being Simulated? Some questions: –What are the basic variables used in the simulations? –What are the basic steps and procedures? –What are the basic forecasting periods?

6. How to Integrate and Implement the Simulators? Two master hands: –The left master hand: Proactive simulators controlling global macro-economy and daily financial prices. –The right master hand: Corporate board structure and audit procedures. How to integrate and implement the simulators to cope with the dynamics? What are the challenges for the corporate board to implement the simulators? Are there any costs for implementation?

7. Conclusions The simulators (commodities, financial futures and derivatives) provide a early warning for decision analysis. The authors provide many proven records how these simulators can successfully track the scandals.