Managing authenticity: the paradox of great leadership

Leaders and followers both associate authenticity with sincerity, honesty, and integrity. It's the real thing--the attribute that uniquely defines great managers. But while the expression of a genuine self is necessary for great leadership, the concept of authenticity is often misunderstood, not least by leaders themselves. They often assume that authenticity is an innate quality--that a person is either genuine or not. In fact, the authors say, authenticity is largely defined by what other people see in you and, as such, can to a great extent be controlled by you. In this article, the authors explore the qualities of authentic leadership. To illustrate their points, they recount the experiences of some of the authentic leaders they have known and studied, including the BBC's Greg Dyke, Nestlé's Peter Brabeck-Letmathe, and Marks & Spencer's Jean Tomlin. Establishing your authenticity as a leader is a two-part challenge. You have to consistently match your words and deeds; otherwise, followers will never accept you as authentic. But it is not enough just to practice what you preach. To get people to follow you, you also have to get them to relate to you. This means presenting different faces to different audiences--a requirement that many people find hard to square with authenticity. But authenticity is not the product of manipulation. It accurately reflects aspects of the leader's inner self, so it can't be an act. Authentic leaders seem to know which personality traits they should reveal to whom, and when. Highly attuned to their environments, authentic leaders rely on an intuition born of formative, sometimes harsh experiences to understand the expectations and concerns of the people they seek to influence. They retain their distinctiveness as individuals, yet they know how to win acceptance in strong corporate and social cultures and how to use elements of those cultures as a basis for radical change.     

Modeling total accruals in an international environment: the impact of alternative measures of PPE

The role of accounting regulation hinges upon whether, how, and why managers manage earnings in the absence of regulatory constraints. Determining whether managers engage in earnings management to transfer wealth away from its most economic or socially effective/efficient distribution requires the researcher to first model predicted earnings, or accruals, so that unexpected variations are appropriately classed as earnings management. In this study, we examine whether refining the property, plant and equipment (PPE) variable in the Jones (1991) model of total accruals — by excluding assets not subject to depreciation or amortization, and including intangibles that are subject to amortization — improves the model’s explanatory power. Results indicate that progressively refining the PPE variable improves the explanatory power of the total accruals model. The improvement in explanatory power is modest, however, and statistically significant only when the refinement is to use gross, rather than net, measures, and only when extreme observations remain in the sample. Therefore, the practical significance of this result for researchers is that written-down asset measures can be substituted for the more difficult-to-collect gross measures, particularly when extreme observations are removed from the sample. Adjustments for the effects of upward asset revaluations do not improve the model’s explanatory power.     

Options as a predictor of common stock price changes

Since rather novel techniques such as neural nets allow investigation of nonlinear model specification previously untested, it may be that traditional models of price formation underperform through misspecification rather than market efficiency. This paper explores whether a multilayer backpropagation model offers exploitable profit opportunities for some limited period. Using an intradaytransaction dataset obtained from the European Options Exchange (Amsterdam), We attempted to predict the return on Philips. Two neural nets are contrasted to ordinary linear regression analysis on the basis of three benchmarks (MSE, and net realized returns). An adaptively trained 33-14-1 architecture scored best on all criteria and yielded an annualized 11% return following a simple one-period trading strategy.     

Prospect theory and the risk-return paradox: some recent evidence

There is extensive evidence indicating a negative risk–return relation when a firm’s performance is measured based on accounting measures such as return on asset (ROA) and return on equity (ROE). Previous studies show that the risk-return paradox can be explained by the prospect theory, which predicts that managers’ risk attitudes are different for firms of different performances. However, those studies mostly use earlier data from the COMPUSTAT database, which suffers from a survivorship bias. Failure to account for delisting firms may understate the risk–return relation. We reexamine the mixture of risk-seeking and risk-averse behaviors based on an updated 20-year sample period that is free from the survivorship problem. Interestingly, our results show stronger and robust evidence supporting the prospect theory during the period from 1984 to 2003.     

The paradox of interest rates of the Greenback Era: A reexamination

The two leading explanations for the counterintuitive behavior of interest rates during the Greenback Era (1862-1878) - the resumption expectations model of Calomiris (1988) and the capital flow argument of Friedman and Schwartz (1963) - are inconsistent with each other in terms of their treatment of financial arbitrage. A methodology to identify unexploited arbitrage opportunities in financial data is proposed. Observable returns strongly suggest that the money market of the Greenback Era did not systematically admit arbitrage, except possibly around the times of the Gold Corner of 1869 and the Panic of 1873, which implies that Calomiris provides a more plausible explanation.     

Care in the community: Professional Ethics and the paradox of pro bono

This study is primarily concerned with accounting's claim to be a profession and aims to stimulate further discussion on the kind of education that one would imagine should be commensurate with this claim. In particular, the study reports on a seminar that was designed to introduce students to the concept of a profession. The study describes a visit to one of Glasgow's toughest housing estates. The visit concluded at Ruchill Unemployment and Community Centre where the managing director of a local development agency discussed how some local accounting practices occasionally provided pro bono services in the area. The study picks up on some of the issues discussed during this seminar in order to explore the potential of pro bono publico and Service Learning as ways of educating accounting professionals in the wider concept of public interest. The study concludes by considering the critical educational potential of service learning in undergraduate education and pro bono publico within the area of continuing professional development.     

Role of corporate governance in moderating the risk-return paradox: Cross country evidence

This paper investigates the possible nexus between the 'risk-return paradox' and corporate-governance of firms in a cross-country cross-cultural setup. We use corporate governance as well as accounting risk and return data for a large dataset of 45,322 firm-years from 27 countries and show that the firm-level risk-return association may be a non-linear one, contingent on the firm performance. Firms which are below the industry median in terms of operating performance, exhibit an inverse relation in line with Bowman's (1980) ‘paradox' while those above-median exhibit a positive risk-return association. Further, we establish empirically that such risk-return association could be due to the rent-seeking actions of managers and that strong corporate-governance in a firm substantially moderates and reverses these effects. Our results are robust and hold strong through a number of robustness tests.     

Fund governance contagion: New evidence on the mutual fund governance paradox

Why is poor governance pervasive in the mutual fund industry? Researchers, practitioners and regulators have attributed this failing to a lack of director independence from fund management. This paper proposes an alternate explanation: fund governance is contagious. Fund directors act as vectors, transmitting governance attributes from their primary place of employment to the fund. Using hand-collected director employment data, the paper finds that boards dominated by directors tied to the finance industry, to shareholder unfriendly firms, and to shareholder unfriendly funds, have worse governance. Examining employment shocks, litigations and firm bankruptcies, within a quasi-experimental framework, provides causal evidence that these connections cause fund governance spillover. Overall, the results suggest that contagious governance plays a role in propagating business malpractice in the mutual fund industry.     

The paradox of development in the middle east

At a time of rapid change in the Middle East, the enforcement of Western models of development has eroded traditional Islamic values and undermined Muslims' confidence in themselves and their cultural heritage. The Islamic idea of development cannot be reduced to any of the models prevailing in the West, which are based on concepts of progress and evolution alien to the Islamic worldview. Middle Easterners need to reconstruct an Islamic concept of development rooted in their own cultural values and reflecting the historical development of Islam. Islamic traditions provide a set of political precepts with universal implications, and Islam can make an important contribution to an integrative world order.     

Life table methodology applied to NHANES II database for analysis of mortality associated with cholesterol/HDL ratios

This article describes the association between total cholesterol to high-density lipoprotein (HDL)-cholesterol ratios and all-cause mortality in a large cohort of Americans with nearly 17 years of follow-up. Detailed actuarial life table methodology was used. It concludes that the relationship is best described as a J-shaped curve.     

The paradox of greater NGO accountability: A case study of Amnesty Ireland

Despite mounting public, governmental and corporate interest in issues of non-governmental organisation (NGO) accountability, there are few academic studies investigating the emergence of accountability mechanisms in specific advocacy NGO settings. Drawing on the theoretical constructs of hierarchical and holistic accountability, this paper addresses this research gap by investigating recent developments in accountability practices at the Irish section of the human rights advocacy NGO Amnesty International. Through analysis of a series of in-depth interviews with managers in Amnesty Ireland, supported by extensive documentary scrutiny, this study examines reasons why Amnesty’s historical reliance on internal forms of accountability has been augmented with a range of ad hoc external accountability mechanisms. The study reveals that while managers favoured the development of holistic accountability mechanisms exhibiting accountability to a wide range of stakeholders, a hierarchical conception of accountability privileging a narrow range of (potentially) powerful stakeholders, has begun to dominate external accountability discourse and practice. It was widely perceived that this trend could, somewhat paradoxically, prove counterproductive to the achievement of Amnesty’s mission. Resolving this paradox will, at a minimum, involve Amnesty Ireland’s leadership becoming more open to and more knowledgeable about a broader, more holistic accountability conception. The paper considers the possible implications of these findings for the development of NGO holistic accountability practice more generally.     

The association between the length of the QT interval and mortality in the Cardiovascular Health Study: a mortality analysis

Prolonged QT interval was found to be associated with increased cardiac and all-cause mortality in a subgroup of the Cardiovascular Health Study (CHS). A mortality analysis is presented of this study, underscoring the need to use the appropriate expected group.     

The roles of rating outlooks: the predictor of creditworthiness and the monitor of recovery efforts

Review of Quantitative Finance and Accounting - Using a comprehensive U.S. rating sample from S&P between 1981 and 2015, we examine the information content, responsiveness to credit risk...