Accounting & Management
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- March 2024
- Case
Governing OpenAI
By: Lynn S. Paine, Suraj Srinivasan and Will HurwitzIn late November 2023, OpenAI’s new board of directors took stock of the situation. The company, which sought to develop artificial general intelligence (AGI)—computer systems with capabilities exceeding human abilities—was looking to regain its footing after a chaotic leadership and governance crisis that played out a week earlier. The previous board had stunned observers by firing CEO Sam Altman and removing him from the board for unspecified reasons. Days later, Altman was back as CEO, directors resigned, and a new three-person board formed with Bret Taylor, Larry Summers, and Adam D’Angelo, the only continuing director. The new board of directors faced an urgent set of issues—around OpenAI’s governance, how to build out the board, AI ethics and safety, and their relationship with a CEO one of them had helped fire. Their quandary was complicated by OpenAI’s unique mission to create AGI to benefit all of humanity and by its unusual structure as a non-profit controlling a for-profit entity. The AI it sought to develop had the potential to be world-changing—for better, or for worse—and the world was watching closely as the board sought a path forward.
- March 2024
- Case
Governing OpenAI
By: Lynn S. Paine, Suraj Srinivasan and Will HurwitzIn late November 2023, OpenAI’s new board of directors took stock of the situation. The company, which sought to develop artificial general intelligence (AGI)—computer systems with capabilities exceeding human abilities—was looking to regain its footing after a chaotic leadership and governance crisis that played out a week earlier. The previous...
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- March 2024
- Article
The Asymmetric Mispricing Information in Analysts’ Target Prices
By: Jeremiah Green, John R. M. Hand and Anywhere SikochiWe study the mispricing information present in the target prices of U.S. and international analysts. We hypothesize that asymmetry in the value-relevance of the information that managers supply to analysts, combined with asymmetry in the incentives facing analysts to curry favor with managers, leads to analyst-claimed undervaluation being more predictive of future stock returns than analyst-claimed overvaluation. Our empirical tests isolate analyst-claimed mispricing by first removing analysts’ estimates of the cost of equity from the returns implied by target prices, then separating analyst-claimed undervaluation from overvaluation. We find that target prices only predict future returns (at 16¢ to 18¢ on the dollar) when analysts claim undervaluation, not when they claim overvaluation. We also observe that analyst-claimed undervaluation predicts future returns more strongly after firms experience low returns and when macro-driven valuation uncertainty is low.
- March 2024
- Article
The Asymmetric Mispricing Information in Analysts’ Target Prices
By: Jeremiah Green, John R. M. Hand and Anywhere SikochiWe study the mispricing information present in the target prices of U.S. and international analysts. We hypothesize that asymmetry in the value-relevance of the information that managers supply to analysts, combined with asymmetry in the incentives facing analysts to curry favor with managers, leads to analyst-claimed undervaluation being more...
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- February 2024
- Case
CLSA: Integrating ESG in Stock Valuation
By: Shirley Lu, Aaron Yoon and Billy ChanIn 2023, a senior financial analyst at the Hong Kong-based stock brokerage firm CLSA was surprised to see that, based on his calculations, the financial impact from climate risks on a major Indian cement manufacturing company’s projected earnings could be massive. While conducting fundamental analysis and making stock recommendations to equity-trading clients was the “bread and butter” for financial analysts, incorporating ESG factors in stock valuation was not yet a common industry-wide practice. Given the magnitude of the financial impact, the senior analyst, who was also the head of ESG research, pondered if he should change his view on the stock, and how he could develop a new way of valuing stocks adjusted by ESG risks.
- February 2024
- Case
CLSA: Integrating ESG in Stock Valuation
By: Shirley Lu, Aaron Yoon and Billy ChanIn 2023, a senior financial analyst at the Hong Kong-based stock brokerage firm CLSA was surprised to see that, based on his calculations, the financial impact from climate risks on a major Indian cement manufacturing company’s projected earnings could be massive. While conducting fundamental analysis and making stock recommendations to...
About the Unit
The Accounting & Management unit at Harvard Business School strives to be the worldwide leader in research, course development, and teaching on top managements' use of performance measurement systems to:
- Communicate with external investors to ensure that their firms' securities are fairly priced and that they are able to access capital,
- Measure and evaluate their firms' economic performance,
- Improve resource allocation and strategy implementation within their firms, and
- Build accountability for performance through effective external and internal governance.
Unit research, course development, and teaching fall into two broad areas: Financial Reporting and Analysis and Management Accounting. Our research helps scholars and educators understand current best practices for the design and use of performance measurement systems that help managers to build more effective, value-creating organizations. Our teaching materials enable us to bring the results of this research into the classroom, and to practice.
Recent Publications
Governing OpenAI
- March 2024 |
- Case |
- Faculty Research
Post-Wirecard: BaFin under Mark Branson
- March 2024 |
- Teaching Note |
- Faculty Research
Accounting Standards for the 21st Century
- March 2024 |
- Module Note |
- Faculty Research
The Asymmetric Mispricing Information in Analysts’ Target Prices
- March 2024 |
- Article |
- Review of Accounting Studies
The Anatomy of Fraud
- February 2024 |
- Course Overview Note |
- Faculty Research
CLSA: Integrating ESG in Stock Valuation
- February 2024 |
- Case |
- Faculty Research
Harvard Business Publishing
Seminars & Conferences
There are no upcoming events.