In creating wealth, the corporate sector is hampered by weaknesses in the corporate governance system and the accounting system. The analysis presented in this paper supports recommendations that managements and boards (1) provide value-relevant, long-term track records for the firm and its...

This PowerPoint deck is used in the classroom to provide a broadly useful framework for value creation. The theme is that we are better equipped to deal with value creation by first gaining insights into how we build knowledge. Part 1 discusses core beliefs critical to a sharpened worldview that...

Limited attention theory predicts that higher salience of earnings news implies a stronger immediate market reaction to earnings news and a weaker post-earnings announcement drift (PEAD) or reversal (PEAR). Using a new measure, SALIENCE, defined as the number of quantitative items in an earnings...

Long-term value creation begins with clarity about the purpose of the firm and about management's core responsibilities. Value creation is critically tied to how well management develops and maintains a knowledge-building culture. These ideas are plainly communicated in this PowerPoint...

This PowerPoint has proven useful for corporate executives, investors, and business students for thinking about the role of the firm's knowledge-building culture in creating value in general and sustaining competitive advantage in particular. Competitive advantage is reflected via the fade rate...

Using a unique dataset provided by Institutional Shareholder Services (ISS), we relate 51 governance provisions to firm operating performance as proxied by return on assets and return on equity. We show that seven (six) governance provisions are significantly and positively related to return on...

The pragmatic theory begins with clarity about the firm's purpose; asserts that knowledge-building proficiency is the primary determinant of a firm's long-term performance; stresses systems thinking; and connects firm performance to market valuation and shareholder returns via long-term, life-cycle...

Traditional economic theory holds that a business cash-flow tax is superior to a business income tax because it is more efficient and progressive. But much of the literature espousing this view does not explicitly specify the full range of assumptions underlying these claims, let alone explore...

The conventional Net Zero perspective with its emphasis on ESG metrics represents linear cause-and-effect thinking. That is, implementation of the metrics will then change company behavior with the eventual effect of a successful Net Zero transition. Different perspectives are presented rooted...

Using a unique dataset provided by Institutional Shareholder Services (ISS), we relate 51 governance provisions to firm operating performance as proxied by return on assets and return on equity. We identify six corporate governance provisions that are significantly and positively linked to...