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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
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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
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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
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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
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