George Serafeim

Associate Professor of Business Administration

George Serafeim is an Associate Professor of Business Administration in the Accounting and Management Unit. He teaches in the MBA and doctoral programs and co-chairs the Executive Education program "Aligning Sustainability with Corporate Performance." His work on how organizations integrate sustainability issues into their business models, integrated reporting, and sustainable investing has won numerous awards and has been presented at more than 100 conferences and seminars in over 20 countries.

Professor Serafeim's research interests are international, focusing on equity valuation, corporate governance, and corporate reporting issues. His work has been published in prestigious academic and practitioner journals such as the Strategic Management Journal, Journal of International Business StudiesReview of Accounting Studies, Journal of Accounting Research, Journal of Finance, Contemporary Accounting Research, Management Science, Financial Analysts Journal, MIT Sloan Management Review, Journal of Applied Corporate Finance, Harvard Business Review and has appeared in media outlets including Bloomberg, Financial Times, The Wall Street Journal, The Guardian, The Economist, The New York Times, and NPR. He has written more than thirty business cases on organizations from around the world. He is the co-author with Professors Richard Macve and Joanne Horton of a book on the transparency and valuation of insurance companies and the co-author of a study, commissioned by the European Union, that evaluated the relevance of public information disclosed during the transition of European companies to IFRS.

Professor Serafeim's work with Professor Ioannis Ioannou on corporate sustainability and sell-side investment recommendations received the best paper award from the Academy of Management, and their work on corporate sustainability and access to finance received the best paper award from the United Nations Principles for Responsible Investment network. Professor Serafeim's research with Professor Paul Healy on anticorruption efforts and firm performance was awarded the Hermes Fund Manager best paper prize (second place), his work with Professors Mo Khan and Leonid Kogan on the effects of price pressure on equity issuance and corporate acquisitions was awarded the Whitebox Prize (runner up), and his work with Robert Eccles on "The Performance Frontier" was recognized as "The Big Idea" at Harvard Business Review. He has served on the Technical Review Committee of the Global Initiative for Sustainability Ratings and on the Standards Council of the Sustainability Accounting Standards Board. He has advised numerous organizations around the world and he is a co-founder of KKS Advisors.

Professor Serafeim earned his doctorate in business administration at Harvard Business School, where his dissertation was recognized with the Wyss Award for Excellence in Doctoral Research. He received a master's degree in accounting and finance from the London School of Economics and Political Science, where he was awarded the Emeritus Professors' Prize for best academic performance.

  1. Leading the Global 1000

    Globalization has concentrated economic power within a group of large companies who are now able to change the world at a scale historically reserved for nations. Just 1,000 businesses are responsible for half of the total market value of the world's more than 60,000 publicly traded companies. They virtually control the global economy. Consider how quickly this situation has emerged. In 1980 the world's largest 1,000 publically listed companies made $2.64 trillion in revenue, or $7.0 trillion in 2011 dollars, adjusted using the consumer price index. They directly employed nearly 21 million people, and had a total market capitalization of close to $900 billion ($2.4 trillion in 2011 dollars), or 33 percent of the world total. By 2011 the world's largest 1000 companies made $34 trillion in revenue. They directly employed 68 million people, hundreds of millions in their supply chains, and had a total market cap of $30 trillion. These companies and their supply chains have an enormous impact for both good and ill on society. They create goods and services for customers, wealth for their shareholders, and jobs for millions of people. They also consume vast amounts of natural resources, pollute the local and global environments at little or no cost, throw economies into recessions due to poor risk management, and, in some cases, hurt employees' well-being if wages and working conditions are inadequate.

    Governments, consumers, investors, and civil society are putting unprecedented pressure on the Global 1000 to adapt their business models to create value for all stakeholders and reduce negative externalities. At the same time, public companies are under constant pressure to deliver increasing profitability to satisfy investors by increasing stock prices and paying dividends. In this multidisciplinary course we will explore business model threats and how they arise from social pressures, impediments to allowing companies to adapt, the innovations that need to take place in order for a company to adapt, and how the ecosystem of institutions in which corporations reside can help the adaptation process. We will explore issues such as resource scarcity, conflicting regulatory regimes, resource allocation and capital budgeting, corporate reporting, employee motivation, consumer behavior, corporate governance, and short-termism. The classes in this course feature case discussions, lectures, and "brainstorming sessions." The students will read both academic research and practitioner articles. The main unit of analysis in this course is the Global 1000 and large institutional investors and the main dependent variable of interest is long-term growth and return-on-capital.

    Keywords: sustainability; innovation; environmental performance; governance; reporting; accounting; accounting information; regulation; corporate social responsibility; large-scale enterprise; global; global banks; global business; Corporate performance; corporate culture; leadership; capital budgeting;

  2. Innovating for Sustainability - Executive Education

    Corporate decision makers often struggle to balance investors' expectations of financial performance and the demands of other stakeholders focused on nonfinancial— environmental, social, and governance—performance. In this new program, you'll discover how leading companies are developing innovative products, processes, and business models to meet both financial and nonfinancial objectives.

    Keywords: sustainability; innovation; environmental performance; governance; investment management; corporate social responsibility;

  3. The Role of the Corporation in Society

    Classical financial economic theory defines the role of the corporation to be shareholder value maximization.  According to this view, meeting the needs of other stakeholders along social and environmental dimensions should only be done if it contributes to creating shareholder value.  Making these decisions assumes that the information is available for doing the necessary analysis and that management and shareholders have the same risk profiles and time frames for value creation.  However, this classic view of the corporation is coming under pressure as the government and civil society are increasingly interested in the role companies should play in contributing to environmental and social sustainability.  They are essentially arguing for a multi-stakeholder view which does not take the primacy of one particular type of stakeholder, shareholders, as a given.  Others argue that, with a sufficiently long-term view, no tradeoffs need to be made since value can only be created for shareholders if the company is not destroying value for other stakeholders.  Globalization, recurring crises in the world's capital markets, and the failure of companies to adequately manage risk are also contributing to a growing debate about the role corporations should have in society today.  We are at the early stages of even framing the discussion. The purpose of this doctoral seminar is to first put some structure to the debate and second to pose alternative models to the dominant one in place today.  The seminar is a broad and interdisciplinary one with readings from a variety of fields and disciplines.

    Keywords: sustainability; corporate culture; corporate accountability; corporate social responsibility; accounting; reporting; leadership;

  4. IXP Course: South Africa; Innovating for Sustainability in an Emerging Market

    This course is intended for future business leaders who are interested in how companies can develop more sustainable strategies, especially in emerging markets. A sustainable strategy is one that enables a company to create value for its shareholders over the long term by contributing to a sustainable society. This requires minimizing negative and maximizing positive externalities along all material dimensions of environmental, social, and governance (ESG) performance. South Africa is a leading emerging market in terms of companies working to develop sustainable strategies. This is particularly important for certain sectors, such as mining, which are very important in this resource-rich country. South Africa's leadership in sustainability has been driven by three major codes of corporate governance: King I (1994), King II (2002), and King III (2009). King III mandates integrated reporting-the combination of financial and ESG data in a single document-of all companies listed on the Johannesburg Stock Exchange. This IXP will focus on what companies and the investment community are doing to create sustainable strategies and the resultant impact on the South African economy and society.

    Keywords: sustainability; corporate accountability; corporate social responsibility; governance; accounting; reporting; leadership; emerging economies; Africa;