Consistency in meeting or beating earnings expectations and management earnings forecasts

This paper provides evidence that firms that have consistently met or beaten analysts’ earnings expectations (MBE) provide more frequent “bad news” management forecasts than firms with no established string of MBE, particularly when existing analyst forecasts are optimistic. This suggests that firms with a consistent MBE record are more likely to guide analysts’ expectations downward to avoid breaking the consistency. Subsequent analyst forecast revisions following bad news management forecasts issued by these firms are dampened, implying that analysts suspect that these forecasts may be opportunistic. The relation between management forecasts and MBE consistency is stronger after Regulation FD.     

River stories: Genealogies of a threatened inland river system

Most people now living in Australia's “bread basket”, the much-degraded Murray Darling Basin, are like my family, descendants of convicts or free settlers who came to the inland in the 19th or early 20th centuries. Our legacy includes the dispossession of indigenous peoples, species extinction and the ongoing degradation of the ecological communities which now sustain us. My own family's river stories which “begin” with a pair of impoverished Gaels who migrated with their offspring from the Scottish Highlands, can be considered paradigmatic. I re-narrate it in this essay in response to philosopher Alasdair MacIntyre's challenge—I can only answer the question ‘What am I to do?’ if I can answer the prior question ‘Of what story or stories do I find myself a part?’Some of these family stories I find myself part of, especially those that have been enacted within the catchment of the now-threatened Lachlan River, are very discomforting, but where do they “truly” begin? In seeking to understand my relationship with the river and its catchment, and with the indigenous peoples “my mob” displaced, I explore several possible “beginnings” and ask a further question: what stories do I want to be part of as co-author, co-narrator and protagonist. I then offer my own yet-to-be enacted “truth and reconciliation” stories about the future of the inland plains I love.     

我国巨灾风险可保性的理性思考

巨灾保险虽然一直未能真正踏上破冰之旅,但近年频发加剧的巨灾,使巨灾保险再次成为保险业的聚焦领域。巨灾风险可保性争论不休,业界徘徊不前,厘清巨灾风险的保险属性,可否引导市场参与巨灾风险的有效管理,特别是金融市场、保险市场和资本市场的联动推进,更是尚需解决的问题。基于巨灾风险管理的理论分析认为,我国巨灾风险具备可保性有其理...     

Are the best of the best better than the rest? The effect of multiple rankings on company value

In this paper, we explore the cumulative and interactive effects from being listed on one or more of four popular annual surveys (Fortune’s “Most Admired Companies” and “100 Best Companies to Work For,” Business Ethics “Best Corporate Citizens,” and Working Mother’s “100 Best Companies for Working Mothers.”) We find portfolios constructed of firms selected across these surveys add value to a portfolio, initially and over longer-holding periods, but the overall results are driven by the performance of those firms selected from the Most Admired Companies and Best Corporate Citizens rankings. We also discover that being listed in two or three different surveys on a yearly basis produces incremental value.     

Total accounting in action: reflections on sten Jönsson’s Accounting for Improvement

Sten Jönsson’s recent book Accounting for Improvement (1996) examines organizational change processes based on several in-depth case-studies, conducted during a period of about ten years. In this review essay the arguments of the book are placed alongside recent discussions on management accounting practices, which have increasingly discovered the “hidden” potential of accounting and accountants. Jönsson’s book offers exciting insights into organizational improvement processes, which are linked to accounting in a particularly broad, “total accounting” sense. The major limitation of the book is held to be that it places accountants in the background of the analysis, perhaps reflecting problems in empirical research designs of the case-studies. As a result, the relationships and communication patterns between accountants and line personnel remain largely unexamined.     

Do Stars Shine? Comparing the Performance Persistence of Star Sell-Side Analysts Listed by Institutional Investor,the Wall Street Journal,and StarMine

We investigate the profitability persistence of the investment recommendations from analysts listed in four different star rankings, Institutional Investor magazine, StarMine’s “Top Earnings Estimators” and “Top Stock Pickers”, and The Wall Street Journal, and show the predictive power of each evaluation methodology. We found that only Buy and Strong Buy recommendations from the entire group of Star analysts outperform those of the Non-Stars in the year after election, while Sell and Strong Sell recommendations performed as those of the Non-Stars. We document that the highest average monthly abnormal return of holding a long-short portfolio, 0.97 %, is obtained by following the recommendations of the group of star sell-side analysts rated by StarMine’s “Top Earnings Estimators” during the period from 2003 to 2014. Since earnings are one of the main drivers of stock prices, the results obtained are in line with the notion that focusing on superior earnings forecasts is one of the top requirements for successful stock picks.     

Confucian culture and the external pay gap

We examine the impact of Confucian philosophy on external pay gaps, and find that a Confucianist atmosphere is negatively associated with firms’ external pay gaps for both executives and employees. Mechanistically, the Confucian concept of “righteousness” reduces the self-interested motivation of management, in turn reducing executives’ external pay gap; “humaneness” causes management to focus on protecting employees’ rights and interests, benefiting employees’ compensation; and “honesty” improves information disclosure, reducing the external compensation gap for both executives and general employees. The inhibitory effect of Confucian culture on the external pay gap is greater in regions with weak formal institutions and non-state-owned firms, while foreign cultural shocks attenuate the Confucian influence. Finally, the Confucian culture-driven reduction of the external pay gap improves enterprises’ economic efficiency.     

Insights into method triangulation and “paradigms” in interpretive management accounting research

This paper seeks to develop our understanding of method triangulation and research paradigms in interpretive management accounting research. Relying on field illustrations, the paper provides insight into how method triangulation has actually been received within the Finnish management accounting research community. At present, talk can be distinguished from action in method triangulation. Relying further on this insight, the paper discusses the meaning of a “paradigm”. It points out that for the individual scholar the paradigm is not necessarily a coherent, well-reflected philosophical standpoint. Instead, it represents a socio-political assemblage that suggests a “methodological identity” and provides “paradigmatic economies” for the self-interested academic. We also put forward a view on the future of method triangulation and paradigmatic détente more generally.     

On theory as a ‘deliverable’ and its relevance in ‘policy’ arenas

This paper comments on Lee Parker's paper on “Qualitative management accounting research: deliverables and relevance”. Using it as a starting point, it highlights the need for more informed modes of theorizing as opposed to ‘more theories’ and the performative effects of theorising. Theories and theorising already matter although what they ‘deliver’ and influence will be contingent on their instantiation in specific action nets. Further, in order that such social practices might continue to generate desirable consequences, stronger forms of research training should be developed.     

Genetically modified organisms and the age of (Un) reason? A critical examination of the rhetoric in the GMO public policy debates in Ghana

Using narrative policy analysis we examined the adversarial rhetoric of claims-makers in their bid to undermine alternative and conflicting accounts of GMOs as environmental and human health risk and to forestall any challenges to the scientific authority of the technological deterministic account of the GMO policy debates in Ghana. The study shows that the GMO discourse was built with the rhetorical frames of smallholder farmer vulnerability and entitlement used in the account it contradicts, thereby legitimating its own appeal for responsive remedies. Civil society claims attacked GMOs as discriminatory and as an environmental and human health risk. Government and scientists engaged in unsympathetic counter rhetorical strategies in hopes of debunking or neutralizing the claim made by civil society. In other words, Government and scientists were denying the claim that GMO was discriminatory and posed significant human health risk, as well as the call to action to do something about GMOs. Civil society adapted the counter rhetoric of insincerity, claiming that scientists had some kind of “hidden agenda” behind their claim, such as eagerness to just earn money from their patents on GMOs. It is imperative that communication on GMOs includes the underlying assumptions, the uncertainties and the probabilities associated with both best and worst case scenarios. This is a necessary condition to minimise misinformation on GMOs but may be insufficient to completely erase conspiracy theories from the minds of the public especially when scientists and government are perceived to be biased towards multinational corporations that are ostensibly preoccupied with making profits.     

Claiming a jurisdiction for the “Public Accountant” in England prior to organisational fusion

This paper exploits the interpretive content of city-based directories to demonstrate the emergence of “public accountants” as a professional grouping in England during the period 1800–1880, and it applies Andrew Abbott’s The System of the Professions (1988) to explain the broader significance of that finding. We reveal that, by the 1870s, “public accountants” in England had achieved public recognition as expert suppliers of services over which they possessed an effective jurisdiction, and we conclude that Abbott’s theory provides a meaningful framework for explaining the history of public accounting prior to organisational fusion in 1880. We also consider why the label “public accountant” failed to satisfy the conditions identified by Abbott’s analytical framework for the continuing success of their professional project, and conclude that the need for a more effective means of occupational differentiation led to the reconstruction of a public accountancy profession based instead on the title “chartered accountant”.     

The financial Logos: The framing of financial decision-making by mathematical modelling

This paper introduces the notion of “financial Logos”, defined as a structuring discourse embedded in management tools and beliefs of financial practices. I hypothesize that this discourse contains a specific representation of risk mathematically modelled by probability measures. Next I use a performativity based approach to describe the concrete action of the financial Logos on financial practices: the framing of financial decision-making by mathematical modelling. I argue that it is not possible to think of a given financial practice without epistemologically and sociologically thinking of the contribution of the mathematical modelling to this practice. I conclude with consequences for ethics of finance: extending ethics of action to epistemic ethics, I suggest that, in finance, any preference in mathematical modelling is also a preference in ethics.     

Which approach to accounting for employee stock options best reflects market pricing?

We use a residual income valuation framework to compare equity valuation implications of four approaches to employee stock options (ESOs) accounting: APB 25 “recognize nothing”, SFAS 123 (revised) “recognize ESO expense”, FASB Exposure Draft “recognize and expense ESO asset” and “recognize ESO asset and liability”. Theoretical analysis shows only grant date recognition of an asset and liability, and subsequent marking-to-market of the liability, results in accounting numbers that capture the dilution effects of ESOs on current shareholder value. Out-of-sample equity market value prediction tests and in-sample comparisons of model explanatory power also support the “recognize ESO asset and liability” method.     

Wie man durch Moral ins „Geschäft“ kommt: Ein ordonomischer Beitrag zum betrieblichen Risikomanagement

Through an analysis of Alfred Krupp’s 19th-century social welfare program, this paper develops an ordonomic contribution to corporate risk management. The paper argues that companies can employ ‘morality as a factor of production’ by a differentiated business strategy of moral commitments. In this way, companies can not only considerably reduce their exposure to the undesirable risks of losing core business relationships with important stakeholders. But at the same time, businesses may increase their readiness to take desirable innovation risks that are pivotal for long-term value creation. Ultimately, the paper develops an argument for how companies can better live up to the role of being an agent of societal value creation, often articulated by concepts such as “corporate social responsibility” or “corporate citizenship”.     

Command-and-control: Alternative futures of geoengineering in an age of global weirding

In July 2012, Russ George, the founder of Planktos Inc., organized efforts to dump 100 tons of iron sulfate off the coast of Canada to engineer a plankton bloom that would, ostensibly, absorb carbon dioxide and store it in the depths of the Pacific Ocean. As George's geoengineering experiment is one of the largest and first of its kind, many were quick to denounce his rogue action while others were delighted to see that he succeeded as a large algae bloom was reported to have emerged. Using the George event as a point of entry for exploring alternative futures of geoengineering in an age of global weirding, this project fuses the 2 × 2 scenario modeling technique with the “Mānoa School” four-futures method by situating command and control, along X (control) and Y (command) axes as two critical uncertainties and key drivers of change that will impact the design, development, and diffusion of climate mitigation engineering initiatives, which some see as holding the only solution to avert global catastrophe and others condemn as a postnormal remedy.     

Organizational resilience as a key property of enterprise risk management in response to novel and severe crisis events

The COVID-19 pandemic represented a novel risk event. Research on similar past crises identified risk culture and leadership as properties of effective enterprise risk management to enable companies to respond “like a rubber ball” to such events. The focus of this paper is on the question of how enterprise risk management (ERM) can develop such resilience. A comprehensive literature review was undertaken to enrich the ERM framework with insights from organizational resilience theory, resource and dynamic capability theory and system psychodynamic thinking, addressing the human dynamics at play when coping with such a crisis. It was complemented by a global empirical study among C-level executives in insurance on the management of the COVID-19 pandemic. Some key insights were identified: a learning culture, a strong system permeability, a clear purpose, strong leadership to ensure alignment and autonomy of teams and a culture of trust, where employees feel safe, but also dare to take courageous steps to benefit from the crisis. While the newly developed organizational resilience framework identifies the key themes, the organizational resilience map provides guidance on how to develop organizational resilience. This paper enables researchers and practitioners to identify key themes to render a company more resilient to unforeseen risk events.     

Management earnings forecasts and other forward-looking statements

We identify forward-looking statements (FLS) in firms’ disclosures to distinguish between “forecast-like” (quantitative statements about earnings) and “other”, or non-forecast-like, FLS.  We show that, like earnings forecasts, other FLS generate significant investor and analyst responses. Unlike earnings forecasts, other FLS are issued more frequently when uncertainty is higher. We then show that earnings-related FLS are more sensitive to uncertainty than quantitative statements, suggesting that managers are more likely to alter the content than the form of FLS when uncertainty is higher.  Our study indicates that incorporating other FLS into empirical measures provides a more comprehensive proxy for firms’ voluntary disclosures.     

The determinants of integrating policy-based and community-based adaptation into coastal hazard risk management: a resilience approach

Abstract

A growing number of studies focus on improving the understanding of how the households’ adaptations can be encouraged in the process of coastal hazards and risk management. Particularly, this process is undergoing a major paradigm shift as it moves from an approach dominated by policy-based adaptation to another one in which community-based resilience building is favored. Thus, this article aims to apply a resilience approach to improve the knowledge about how public measures influence private autonomous adaptation behavior, through a transdisciplinary investigation of household adaptation behavior and its determinants. The Resilience Framework of Household Autonomous Adaptation to Climate- and Weather-Related Hazard Risks (ROHACHR) is proposed and combined with a focus group meeting and multivariate analysis to compare pre-disaster, during a disaster, post-disaster adaptations, and resilience behavior of households. Using an empirical survey of the households in three coastal municipalities in Taiwan, we examine the relationships between public measures and private adaptations that provides three distinguishing types of household behavior: ‘core’, ‘trust in governmental aid’, and ‘awareness and structures’. Results show that providing hazard risk information may be one step toward encouraging private autonomous adaptations. Several factors that help foster resilience also appear to be influential in households’ adaptation decisions, such as specific and positive governmental aid, information trust, and social capital. Based on these results, it shows that the ROHACHR is useful to characterize households’ adaptation and resilience behavior and explain how they respond to public measures. Finally, the policy implications of our findings for improving resilience of coastal communities and encouraging public-private collaboration in the process of hazard risk management are discussed.     

The scaling-up of Neighbourhood Care: From experiment towards a transformative movement in healthcare

To meet present and future challenges in healthcare, radically new approaches are needed that contribute to transforming the healthcare system. In the Netherlands this transition was envisioned by the Transition Programme Long-term Care (2007–2010) as “a fundamental change towards a more human centred, affordable and socially embedded healthcare system”. One of the experiments in this programme was Neighbourhood Care (in Dutch “Buurtzorg”): small-scale, self-managed teams of nurses who provide high-quality homecare in neighbourhoods. This article looks at Buurtzorg from the perspective of transition studies, building on the framework of ‘deepening, broadening and scaling-up’ transition experiments. We analyse how Buurtzorg could rapidly develop from a local experiment to a network of more than 800 teams and also spread to different care domains and abroad. The rapid development of Buurtzorg is explained by identifying their strategic activities, the alignment of contextual factors and their strategic position as outsider towards the regime. We conclude that Buurtzorg has become a ‘symbol’ in a transformative movement that can contribute to a future transition in healthcare. This case study contributes to theoretical and practice-oriented knowledge on how a transition experiment in a social domain can surpass the experimental phase, identifying key strategic activities for niche-mainstreaming.     

Merging art and design in foresight: Making sense of Emerge

Emerge: Artists and Scientists Redesign the Future, hosted by Arizona State University in 2012, united artists, engineers, bioscientists, social scientists, storytellers and designers to build, draw, write and play with the future. Over three days, and in nine different workshops, participants created games, products, monuments, images and stories in an effort to reveal the texture and feel of emergent futures. The Emerge workshops drew from a burgeoning field of future-oriented methods that infuse art, design and information technology into the development and delivery of scenarios and design fictions – a constellation of practices I call “mediated scenarios”. This introduction and the articles in this special issue, work to make sense of these emerging practices, and of Emerge itself, in order to develop appreciation of this rising genre. In doing so, the papers in this issue ask critical questions about the nature of these novel forms of foresight practice and investigate the trade-offs and potencies involved in the workings of mediated scenarios.