Search results

Sort by: Relevancy | sort ascendingDate | Title | Rating

 
Image by Gerd Altmann from Pixabay

Doing Good' Does Not Always Improve the Bottom Line

Idea posted: May 2019
  • CSR & Governance
  • Finance

The inspiring phrase of “doing well by doing good” oversimplifies the connection between corporate social responsibility and corporate financial performance, according to new research that uncover the conditions that can weaken and even destroy the path from CSR to CFP.

Idea #740
Read Idea
 
Source: Pixabay

The Unintended Consequences of Risk Averse Managers

Idea posted: October 2017
  • CSR & Governance
  • Finance
  • Leadership & Change

Risk aversion and career concerns are pushing managers to play it safe, reducing the shareholder value of their companies — and the incentive compensation structures meant to motivate managers often have the opposite effect. 

Idea #676
Read Idea
 

The Symbolic Value of New Management Practices

Idea posted: April 2016
  • Finance
  • Leadership & Change
  • Learning & Behaviour

A new study shows that companies that are seen as continuously using new and improved management practices are valued more highly by analysts and other observers.

Idea #594
Read Idea
 

Enterprise Risk Management: Lessons from Canada’s Banks and Burning Platforms

Idea posted: January 2016
  • Finance
  • Operations

Once lagging behind banks in other countries, Canadian banks are now a case study in ERM best practices — thanks to factors such as strong regulations, substantial loss events that galvanized ERM efforts, and ERM best practices capabilities of people, processes, systems and data in the individual banks.

Idea #579
Read Idea
 

Stakeholder-Focused Accounting: Value Creation and Risks

Idea posted: December 2015
  • Strategy
  • Finance

Current accounting methods inadequately represent and reward stakeholder value creation. Value-creation stakeholder accounting (VCSA) — which combines the disciplines of accounting, value creation and stakeholder theory — is the theoretical foundation for new stakeholding-focused accounting. The best mechanism for implementing the theory is through value-creation stakeholder partnerships (VCSPs), derived from partnership accounting (as opposed to traditional entity convention accounting). 

Idea #571
Read Idea
 
‘Circle reflect wikipedia 2’ by Dachris, 2006 (Source: Wikimedia Commons)

The Rise of Integrated Corporate Reporting

Idea posted: October 2015
  • Strategy
  • CSR & Governance
  • Finance

Creating an integrated report enables companies to communicate an holistic picture of their prospects, one that is broader than offered by traditional financial reports. Integrated reports cover strategy, governance, performance and forecasts. A new framework for ‘Integrated Reporting’ (IR) has been created to help organizations bring these elements together. Integrated reports benefit both external stakeholders and leaders within the organization.

Idea #555
Read Idea
 

Beware of Over-Optimistic Investors Skewing High-Risk Stock Prices

Idea posted: September 2015
  • Strategy
  • Finance

Investor sentiment has a, sometimes erroneous, effect on stock market valuations. There is evidence that higher risk stocks become overpriced in periods of optimistic sentiment and undervalued when sentiment is pessimistic. Optimism attracts equity investment by unsophisticated, overconfident, retail investors in risky opportunities while such traders are less active in pessimistic periods. Thus sentiment can wrongly influence company share prices, and both investors and CFOs planning financial strategy should be wary.  

Idea #549
Read Idea
 

Deferred Compensation Helps Retain CEOs

Idea posted: August 2015
  • CSR & Governance
  • Finance
  • Leadership & Change

Researchers exploited a U.S. accounting rule change to prove the power of deferred compensation. The rule change pushed many U.S. firms to significantly accelerate vesting of deferred compensation plans. Of the firms that chose to accelerate vesting, a large majority quickly lost their CEOs. During the same period, most firms that did not accelerate their vesting did not see any significant CEO departure.

Idea #536
Read Idea
 

CFO Survey: Most Hit by Hackers Otherwise Optimistic

Idea posted: July 2015
  • Strategy
  • Finance
  • Innovation & Entrepreneurship
  • Operations

New research from Duke University’s Fuqua School of Business global survey of CFOs reveals that 80% of companies have been hacked. Small and medium-sized businesses have been the hardest hit. Other results from the CFO survey include expectations of wage hikes and the impact of the strong U.S. dollar on U.S. exports.

Idea #534
Read Idea
 
The board of directors of the Leipzig-Dresden Railway Company in 1852 (Source: Wikimedia Commons)

Non-Executive Board Members More Risk Averse than Executives

Idea posted: June 2015
  • CSR & Governance
  • Finance
  • Leadership & Change

When it comes to investment, CEOs are perceived to be the most risk tolerant, followed by CFOs and non-executives. However, recent research, measuring risk perception and return demands, shows that CEOs and CFOs are more aligned than previously thought, while non-executives are consistently risk-averse. CEOs will perceive more risk in an investment than CFOs, but don’t act on this perception: they don’t demand a higher minimum return on the investment, contrary to the minimum requirements demanded by non-executives. 

Idea #524
Read Idea
 

Investors Complain Proxy Statements Unclear on Executive Pay

Idea posted: June 2015
  • CSR & Governance
  • Finance
  • Leadership & Change

Proxy statements are often unclear on major issues, notably executive pay questions such as the appropriateness of compensation size and structure, according to a new survey of major asset managers and owners. They also lack clarity on pay ratios, corporate political contributions, corporate social responsibility and sustainability and CEO succession planning.

Idea #528
Read Idea
 
Thumbs Up Ballet in a field choreography of Stars in my Eyes, Quebec, 1944 (Source: Wikimedia Commons)

Does Employee Satisfaction Improve Company Value? It Depends...

Idea posted: January 2015
  • CSR & Governance
  • Finance
  • Learning & Behaviour
  • Operations

Recent studies of U.S. companies have shown that increased employee satisfaction is linked to higher value for the firm. But what about companies in other countries? A new study shows that the U.S. results are replicated only in countries that have levels of labour flexibility (ease of hiring and firing) similar to the U.S. Companies in countries with low labour flexibility show a more limited benefit from employee satisfaction.

Idea #478
Read Idea
 
Good News and Bad News,  John Bagnold Burgess, 1876, courtesy Russell-Cotes Art Gallery & Museum, Bournemouth

Overreacting to Bad Financial News Can Lead to Poor Investment Decisions

Idea posted: November 2014
  • Finance
  • Learning & Behaviour

A University of North Carolina experiment involving investment choices confirms the neuroscience research that reveals how people learn differently from good vs. bad outcomes and when being exposed to positive vs. negative news. The result, the experiment shows, is a bias to too much pessimism when investors experience negative outcomes.

Idea #459
Read Idea
 

The Good and Bad Reasons Corporate Cash Is Trapped Overseas

Idea posted: November 2014
  • CSR & Governance
  • Finance

Policy makers are worried that U.S. companies are using Permanently Reinvested Earnings (PRE) as a tax loophole rather than legitimately trying to grow their overseas operations. They are also concerned about cash trapped overseas instead of being invested in the U.S. economy. The SEC is focused on whether companies are using the rules concerning PRE as a means to overstate their profits. New research shows that a majority of companies are serious about overseas growth rather than looking for tax loopholes. However, cash trapped abroad is still a problem for the U.S. economy. 

Idea #458
Read Idea
 
The Intrigue, James Ensor, 1890 (Courtesy: The Royal Museum of Fine Arts Antwerp)

How Crowdfunding Affects Product and Pricing Decisions

Idea posted: June 2014
  • Finance
  • Innovation & Entrepreneurship
  • Marketing

Seeking investors through crowdfunding sites such as Kickstarter requires entrepreneurs to rethink their pricing and product line strategies, taking into account the mix of investor/buyers who will attach different levels of value to the new product or service.

Idea #402
Read Idea
 

How Peers Influence Ethics: Good Eggs and Bad Apples

Idea posted: June 2014
  • CSR & Governance
  • Finance

A controlled experiment reveals that managers ‘adjust’ their ethics based on the behaviour they witness from peers. If a peer is honest, the observing manager becomes a little more honest, on average. If a peer is dishonest, the observing manager can become significantly more dishonest. 

Idea #386
Read Idea
 
King John signs the Magna Carta, engraving by James William Edmund Doyle, 1864 (Source: Wikimedia Commons)

Corporate Governance from the Bottom Up

Idea posted: January 2014
  • CSR & Governance
  • Finance
  • Learning & Behaviour

Non-executive directors are often seen as a way to avoid corporate ‘buccaneering’ and tame reckless CEOs. Their exact contribution to companies, however, remains unclear. Independent executives, on the other hand, have been shown to be accurate ‘predictors’ of profitability, performance and value creation.

Internal monitoring by the CEO's immediate subordinates should be the new area of focus in the corporate governance debate.

Idea #299
Read Idea
 
The Hare and the Tortoise, Jean Grandville (1803-1847) from the 1855 edition of La Fontaine's Fables (Source: Wikipedia Commons)

Crowdfunding: How a Slow Process Helps in the Long Run

Idea posted: November 2013
  • Finance
  • Innovation & Entrepreneurship

The open process of crowdfunding has some unexpected marketing and funding implications. For example, getting money for your venture faster undermines the marketing potential of crowdfunding. And, for donors at least, a sudden influx of money can lead subsequent donors to look for opportunities elsewhere.

Idea #255
Read Idea
 

Don’t Just Follow the Crowdfunding Crowd

Idea posted: October 2013
  • Finance
  • Innovation & Entrepreneurship
Institutions: London Business School

Crowdfunding has been much talked about as an innovative way of funding entrepreneurial businesses, allowing them to source financial backing from a growing plethora of online platforms. But in reality crowdfunding may not be suitable for a particular business idea or sector – and some crowdfunding platforms may not be viable at all. As the research’s author, Gary Dushnitsky, puts it, “It’s great that crowdfunding is the solution, but to what question and, specifically, in what industry?”

Idea #236
Read Idea
 

How Best Behaviour Boosts the Bottom Line

Idea posted: July 2013
  • CSR & Governance
  • Finance
  • Leadership & Change
Institutions: Henley Business School

Businesses can see beneficial financial effects if they implement policies based on corporate social responsibility. These effects are evident in both the equity and corporate bond markets where they lead to reduced market risk and default risk, lower cost of equity and debt and increased credit quality.

Idea #181
Read Idea
 
Belshazzar's Feast, Rembrandt van Rijn, c.1635-1638, National Gallery, London

CFOs Reborn as Agents of Organizational Change

Idea posted: June 2013
  • Strategy
  • CSR & Governance
  • Finance
  • Leadership & Change

After the financial crisis of 2009–10 and the subsequent global recession, CFOs have suddenly found themselves thrust under the spotlight like never before. They are no longer being seen merely as ‘chief number crunchers’ or even as senior accountants; organizations now want more out of their CFOs, and expect them to act as agents of ‘organizational change’. In this idea, some guidance is offered on how to effectively undertake such change management.

Idea #161
Read Idea
 
CSR Tree

What Is the Real Value in CSR?

Idea posted: June 2013
  • CSR & Governance
  • Finance

Proponents of Corporate Social Responsibility (CSR) insist that companies will “do well by doing good.” Researchers from Northwestern University’s Kellogg School of Management, however, argue that the truth is more complicated. Their research confirms a positive association between current CSR expenditures and the future financial performance of the company. However, it is the signal that CSR spending sends to the market that explains this positive correlation — not the return on investment in CSR.

Idea #158
Read Idea
 
The ladies' egg & spoon race, Picklescott Village Fete & Sports Day 1963 (Source: Picklescott.org.uk)

Motivation by Last Place Aversion

Idea posted: June 2013
  • Finance
  • Leadership & Change
  • Learning & Behaviour

Nobody wants to fail, and being in last place is the worst of failures. New research reveals, however, that the aversion to last place is a powerful driving factor in many decisions, which might offer unexpected opportunities for business.

Idea #155
Read Idea
 
BW of man with telephone

How Time of Day Impacts on Business Conversations

Idea posted: May 2013
  • Finance
  • Leadership & Change
  • Learning & Behaviour
  • Operations

When delivering bad news in a meeting or by phone, the time of day can make a difference in how the news is received. By studying quarterly corporate earnings calls to analysts, researchers showed that the tone of the conversations was more negative in the afternoon than in the morning. In addition, the market had a tendency to overreact to bad news when delivered in the morning. 

Idea #141
Read Idea
 
Warren Buffett the ultimate private equity investor

How Private Equity Can Boost Company Performance

Idea posted: February 2013
  • CSR & Governance
  • Finance
Institutions: HEC Paris

Companies with private equity investors have several advantages over those with only hands-off family or corporate shareholders. Private equity investors become more involved in company strategy and governance than some family or large corporate shareholders, and by keeping a tight control on management and setting clear objectives, these investors can help companies achieve higher market valuations. 

Idea #100
Read Idea
 
Man jumping cliff

Avoiding Flawed Decisions: A Finance Manager's Role

Idea posted: January 2013
  • CSR & Governance
  • Finance
  • Leadership & Change
  • Learning & Behaviour

Finance executives are particularly well-positioned to help organizations improve their decision-making and introduce more rational decisions-making processes. In particular they are in a position to help management teams learn to identify ‘red flags’ and adopt extra safeguards against them. 

Idea #037
Read Idea

Authors

Partner Institutions

Other Institutions

Real Time Analytics