Saturday

It's Saturday and the cats woke me up at 6 am. Pondering about yesterday's meeting and whether I could demonstrate any impact associated with my research, I look at the ICAEW web site because I remember that an ICAEW publication on corporate governance contained a quote from one of my papers. While searching there, I stumble on links to journal articles relevant to the book I'm writing on the history of the Cadbury Committee. The ICAEW library pages are really helpful and well-organised. But..the link to the EBSCO database PDF of the most important article (by the late Jonathan Charkham, who was a member of the Cadbury Committee, on the report of the successor committee chaired by Sir Ronald Hampel) only provides the first four pages. I try going in to EBSCO via the university library but it appears that only the first four pages have been scanned. So I have to complete an inter-library loan request. When you can't access instantly precisely what you're after it becomes frustrating - I have to remind myself that it is still a miracle that all this can be done online at the click of a button.

Returning to the ICAEW library page, I follow the link to an EBSCO search on corporate governance and scan the list of nearly 100 articles. Some of these will be very useful in demonstrating the impact of the Cadbury Code which will be covered in the final chapter of the book. Clicking, skim reading and saving..and I've now been sitting at the PC for over an hour.

Checking my Google Reader alerts, I find a link to a forthcoming paper in JAE by Catherine Schrand and Sarah Zeckman on "Executive overconfidence and the slippery slope to financial misreporting". Their study of a sample of 49 firms subject to SEC Accounting and Auditing Enforcement Releases (AAERs) suggests that intention to defraud is only responsible for about a quarter of these, with the others explained by executives' optimistic bias. I have often thought that the agency theory assumption that managers are self-serving is too simplistic an explanation. The idea that NEDs should monitor management also seems to assume that management motives are to capture resources. Ian Griffith's book on creative accounting pointed out that manipulation could be useful in some circumstances to allow a breathing space. It seems to me to be quite plausible that over-optimistic managers could get into trouble, need to cover this up, use misreporting as a temporary fix and enter a downward spiral. Another fascinating paper to read...could also be interesting to start a LinkedIn discussion.

Husband points out that it's breakfast time...