In their research, Afshin Mehrpouya of HEC Paris and Imran Chowdhury of Pace University explore the mechanisms, and importantly the assumptions behind the mechanisms, involved in transforming social responsibility (CSR) into financial performance (CFP). A closer look at those assumptions reveals why socially responsible behaviour is not always reflected in better financial results. They first […]
Read More… from Doing Good’ Does Not Always Improve the Bottom Line
Many previous studies have examined how personal benefits or the refusal to exert the required effort (also known as ‘enjoying the quiet life’) can lead managers to take actions that hurt their companies. The recent research by Todd Gormley of Olin and David Matsa of Kellogg focuses on an overlooked third motivation for managers acting […]
Read More… from The Unintended Consequences of Risk Averse Managers
The best companies are expected to model, if not to develop themselves, innovative new management practices. This expectation is known as the ‘institutional norm of progress’, and companies that use new and improvement management practices are said to be displaying ‘progressiveness’. A study by a team of researchers from the Rotterdam School of Management, Queensland […]
Read More… from The Symbolic Value of New Management Practices
Canadian banks are now strong, stable and profitable. They have become sterling examples of successful Enterprise Risk Management (ERM). Yet, it wasn’t very long ago that Canadian banks were in a worse position than many banks in other countries. Traditionally, Canadian banks had a greater exposure to high-risk assets and loans. Their exposure to less-developed […]
Read More… from Enterprise Risk Management: Lessons from Canada’s Banks and Burning Platforms
Stakeholder Theory is a view of capitalism that stresses the interconnected relationships between a business, its customers, suppliers, employees, investors, communities and others who have a stake in the organization. Traditional accounting fails to adequately represent the risk and returns of stakeholder activities — i.e. the net value created by ‘stakeholders’. Stakeholders include customers, employees, […]
Read More… from Stakeholder-Focused Accounting: Value Creation and Risks
As our perception of corporate governance has evolved, the need for a new and comprehensive way to report on an organization’s performance and sustainability has become apparent. One that takes account not only of financial performance and compliance issues, but one that also looks at an organization's strategy, overall governance, performance and commercial outlook – […]
In finance, a capital asset's sensitivity to risk is often represented by the quantity beta (β), and investment opportunities that have a high risk profile are known as ‘high beta’ stocks. In this research it is hypothesized that ‘high beta’ stocks are unduly influenced by sentiment due to the investment decisions taken by ‘noise’ traders. […]
Read More… from Beware of Over-Optimistic Investors Skewing High-Risk Stock Prices
Theoretically, deferred compensation should keep executives from leaving the firm. One way to defer compensation is through unvested equity pay. After four or five years, the pay is vested. This deferred compensation plan punishes managers who leave early: they lose any unvested pay. Whether such programs actually help retention has been unclear. Some studies show […]
Highlighting the continuing challenge of information systems security, more than 80% of companies around the world have been hacked by cyber-criminals, including more than 80% of companies in the U.S., and more than 85% of companies in Europe, Asia, Latin America and Africa, according to a worldwide survey of CFOs. The goal in these attacks […]
Read More… from CFO Survey: Most Hit by Hackers Otherwise Optimistic
A new survey from Stanford University’s Rock Center for Corporate Governance on how investors use information from corporate proxy statements reveals deep dissatisfaction with corporate disclosure about executive compensation. The survey, based on responses from 64 asset managers responsible for a combined $17 trillion — show that even the largest and most sophisticated investors find the […]
Read More… from Investors Complain Proxy Statements Unclear on Executive Pay
