More from the Author

• Article | Accounting Horizons | June 2013

  A Framework for Research on Corporate Accountability Reporting

  Karthik Ramanna

  This paper provides an accounting-based conceptual framing of the phenomenon of corporate accountability reporting. 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 firms' resource-allocation decisions, although doing so will not always serve shareholders' interests. I leverage the positive accounting literature's current understanding of properties of financial reports to develop three hypotheses on corporate accountability reporting. I argue that an accountability reporting system is likely to be more useful to a delegator if it (1) mitigates information advantages across delegates and delegators, (2) reports both stocks and flows in the measures of account, and (3) has a mutually agreeable due process to match across periods the actions of delegates and the outcomes of those actions. I show how the successive incidence of these properties in observed corporate accountability reports can be used to determine whether and how those reports create or destroy value for shareholders and other constituencies.

  Citation:

  Ramanna, Karthik. "A Framework for Research on Corporate Accountability Reporting." Accounting Horizons 26, no. 2 (June 2013).

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• Case | HBS Case Collection | 2013 (Revised from original 2012 version)

  Persephone's Pomegranate: Crédit Agricole and Emporiki

  Dante Roscini, Daniela Beyersdorfer and Jerome Lenhardt

  In 2006 the French bank Crédit Agricole bought the Greek Emporiki bank, for €2.8 billion, at the peak of a bull market for bank takeovers. Six years, a major financial crisis, and €5.2 billion of losses later, in a context of great uncertainty in the European banking sector, what decision should Crédit Agricole take regarding Emporiki? Through the example of this European cross-border acquisition the case looks at the Greek banking system before and during the unprecedented Greek sovereign debt crisis; the efforts of Greece and the main actors of the European financial system to prevent the embattled country from having to exit the Euro zone; and the potential scenarios for Greek banks in mid-2012.

  Keywords: Business and Government Relations; Currency; Development Economics; International Finance; International Relations; Banking Industry; Greece;

  Citation:

  Roscini, Dante, Daniela Beyersdorfer, and Jerome Lenhardt. "Persephone's Pomegranate: Crédit Agricole and Emporiki." Harvard Business School Case 713-055, May 2013. (Revised from original November 2012 version.)

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• Case | HBS Case Collection | 2013

  AIG and the American Taxpayers (A)

  Karthik Ramanna and Matthew Shaffer

  Explores the decision faced by AIG's board on whether to join shareholder and ex-CEO Maurice Greenberg’s lawsuit against the U.S. government. The suit, argued by super-lawyer David Boies (of Bush v. Gore and California Gay Marriage fame), claims that in September 2008 the U.S. arbitrarily set aside the rights of AIG's shareholders—violating the Fifth Amendment by taking private property without just compensation—while preserving shareholder rights in other troubled financial institutions, including Goldman Sachs whose ex-CEO was the then Treasury Secretary. The U.S. government moved to dismiss the case arguing that it has wide discretion in times of crisis, but a federal judge allowed the suit to proceed. The case raises two issues central to understanding capitalism: (1) the importance of and limits to property rights; and (2) the role of the state in choosing between varieties of capitalism, here between oligarchic and entrepreneurial capitalism.

  Keywords: financial institutions; Financial Markets; financial crisis; property rights; Financial Institutions; Financial Markets; Financial Crisis; Property; Insurance Industry; United States;

  Citation:

  Ramanna, Karthik, and Matthew Shaffer. "AIG and the American Taxpayers (A)." Harvard Business School Case 113-124, April 2013.

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