- 29 Oct 2018
- Working Paper Summaries
Public Sentiment and the Price of Corporate Sustainability
Public opinions from industry experts are important in the economy but it has not been clear how they affect the valuation of and returns to corporate activities. Using big data and machine learning, this paper analyzes how public sentiment influences the market pricing of firms’ sustainability activities and thereby the future stock returns of portfolios that integrate environmental, social, and governance data.
- 24 Jul 2018
- Op-Ed
4 Ways Managers Can Exercise Their 'Agency' to Change the World
In the face of today’s many messy problems, businesses must strive to help find solutions, argues George Serafeim. Managers who learn to exercise their “agency” at every level will be in the best position to create change. Open for comment; Comment(s) posted.
- 10 Jan 2018
- Research & Ideas
Working for a Shamed Company Can Hurt Your Future Compensation
People who work for a company guilty of malfeasance may see their future compensation curtailed, even if they are guilty of nothing, according to research by Boris Groysberg, Eric Lin, and George Serafeim. Open for comment; Comment(s) posted.
- 06 Dec 2017
- Working Paper Summaries
Does Financial Misconduct Affect the Future Compensation of Alumni Managers?
Analyzing data from an executive search firm, this paper explains how former employees who are free from wrongdoing still pay a price in stigma after incidents of corporate financial misconduct. The finding is potentially disquieting for all managers, because it suggests that one’s human capital can be impaired even long after one moves on and suggests the need for developing a human capital strategy for reacting to misconduct of past employers.
- 28 Aug 2017
- Research & Ideas
Should Industry Competitors Cooperate More to Solve World Problems?
George Serafeim has a theory that if industry competitors collaborated more, big world problems could start to be addressed. Is that even possible in a market economy? Open for comment; Comment(s) posted.
- 22 Aug 2017
- Working Paper Summaries
Investors as Stewards of the Commons?
This paper lays out a framework suggesting that index investors and adequately funded asset owners are a potential mechanism to build and sustain pre-competitive collaborations for addressing environmental and social issues. With long time horizons and significant common ownership of companies within the same industry or supply chain, investors could serve as vehicles for the establishment and/or stability of collaborations between companies.
- 31 May 2017
- Working Paper Summaries
Stock Price Synchronicity and Material Sustainability Information
This paper seeks to understand and provide evidence on the characteristics of emerging accounting standards for sustainability information. Given that a large number of institutional investors seek sustainability data and have committed to using it, it is increasingly important to develop a robust accounting infrastructure for the reporting of such information.
- 13 Mar 2017
- Working Paper Summaries
Why and How Investors Use ESG Information: Evidence from a Global Survey
Survey data from more than 400 senior investment professionals provides insights into why and how investors use environmental, social, and governance (ESG) information as well as the challenges in using this information. This study also documents what investors believe will be important ESG styles in the future.
- 11 Oct 2016
- Working Paper Summaries
Corporate Purpose and Financial Performance
An organization’s purpose is not a formal announcement, but depends on the employees believing in and acting to promote that purpose. This study provides evidence about whether employee beliefs in a strong corporate purpose are associated with superior or inferior financial performance. It shows that organizations where middle managers and salaried professionals feel a strong sense of purpose and have clarity about their job responsibilities and tasks experience superior future financial performance. There was no association for senior executives, sales, or hourly workers.
- 23 Aug 2016
- First Look
August 23, 2016
We get less productive when left to order our own tasks ... Demythologizing sustainable investing ... Can a great customer service company clone itself?
- 09 Aug 2016
- Working Paper Summaries
Shareholder Activism on Sustainability Issues
Shareholder proposals on environmental, social, and governance (ESG) topics have more than doubled in the last two decades. Testing the effect that ESG proposals have on firms’ subsequent ESG performance and market valuation, the authors find a considerable portion (42 percent) of ESG proposals to be financially beneficial and associated with subsequent increases in environmental and social performance, too. Managers need to identify significant sustainability issues, based on their industry, wisely because errors could be value-destroying as the authors show declines in financial value for the rest of the sample (58 percent).
- 22 Jul 2016
- Working Paper Summaries
Who Pays for White-Collar Crime?
Punishments of white-collar crime are systematically related to perpetrator, transaction, and company characteristics. This variation is consistent with executives determining appropriate punishments by an economic analysis of costs and benefits. Even so, senior male executives receive lighter punishments than female peers, for example. These and other variations suggest that not all decisions about punishment are taken with shareholders’ interests in mind: The self-interest of host company executives is also an important consideration.
- 19 Jul 2016
- First Look
July 19, 2016
What happens to white-collar criminals? ... The real story behind Kodak’s fade ... Has Walmart reached the end of its run?
- 21 Mar 2016
- Working Paper Summaries
Voluntary, Self-Regulatory, and Mandatory Disclosure of Oil and Gas Company Payments to Foreign Governments
Throughout its history the oil and gas industry has been vulnerable to expropriation and corruption. To this day, oil and gas firms provide very limited voluntary disclosure on payments to host governments, and that pattern has not changed materially over time. This paper shows that industry-level self-regulation may be effective in enhancing transparency when individual firms are reluctant to voluntarily disclose payments.
- 08 Oct 2015
- Working Paper Summaries
Market Reaction to Mandatory Nonfinancial Disclosure
How does the equity market respond to the adoption of mandatory nonfinancial disclosure? Research by George Serafeim and colleagues.
- 02 Jul 2015
- Op-Ed
The Future of the Greek Economy
Before last weekend's referendum in Greece, Laura Alfaro, Dante Roscini, and George Serafeim explored the country's economic, social, and political crisis. Their insights still stand, even as Greece's situation changes hour by hour. Open for comment; 4 Comment(s) posted.
- 10 Jun 2015
- Research & Ideas
The Transparency Revolution in Corporate Reporting
Professor George Serafeim looks at how standardizing the way companies report data on their social and environmental initiatives could effect revolutionary change in the stock market. Open for comment; 5 Comment(s) posted.
- 20 May 2015
- Working Paper Summaries
Career Concerns of Banking Analysts
This paper investigates how career concerns of analysts that forecast the performance of potential future employers influence their forecasts. Findings show evidence of a walk-down to beatable earnings when forecasting earnings of future employers, but not of companies that are unlikely to be future employers. Results overall suggest that the conflict of interest faced by banking analysts will contribute to the poor information environment of financial institutions. Closed for comment; 0 Comment(s) posted.
- 22 Apr 2015
- Op-Ed
Reforming Greece: Myths and Truths
Greece has largely its leaders to blame for the country's economic crisis, but Europe could help the entire region with some well-targeted aid, says George Serafeim. Open for comment; 1 Comment(s) posted.
How Companies Can Increase Market Rewards for Sustainability Efforts
There is a connection between public sentiment about a company and how the market rewards its corporate social performance, according to George Serafeim. Is your company undervalued? Open for comment; Comment(s) posted.