A framework for research on corporate accountability reporting
By: Karthik Ramanna
Contributors: Harvard Business School
Series: Working paper / Harvard Business School -- 12-021; Working paper (Harvard Business School) -- 12-021
Publisher: Harvard Business School
Published: 2011
Place of publication: Boston]
Language: eng
Number of pages: 38
Description: In January 2013, Harvard Business School, in collaboration with the Journal of Accounting & Economics, will host a conference on research in corporate accountability reporting to address the "growing number of for-profit corporations across the world [that] have started voluntarily augmenting their annual financial reports with reports on 'corporate sustainability,' 'corporate social responsibility,' and 'corporate environmental performance'..." This paper provides some conceptual framing on the phenomenon of corporate accountability reporting. In particular, such reporting is seen as arising from a delegator's (e.g., a citizenry) demand to hold a delegate (e.g., shareholders) to account. When effective, corporate accountability reporting can internalize certain externalities into resource allocation decisions by management, shareholders, and other stakeholders. However, doing so will not always serve shareholders' interests. I leverage the positive accounting literature's current understanding of properties of financial reports to develop some basic hypotheses on corporate accountability reporting. I argue that an accountability reporting system is likely to be more useful if it: (1) accommodates for a delegate's information advantage over her delegator; (2) produces periodic performance and position reports; and (3) has a mutually agreeable due process to match across periods the actions of delegates and the outcomes of those actions. Further refinement and tests of these hypotheses are likely to help us better understand some of the fundamental questions in corporate accountability reporting.
Notes: "September 2011" -- Publisher's website.

Includes bibliographical references.