Hugh Grove

Hugh Grove
University of Denver · School of Accountancy

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81
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Publications

Publications (81)
Article
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The major research question of this paper is what are the challenges for boards of directors to help their companies manage, assess, and track performance with environmental, social, and governance (ESG) measures? There are currently no global required ESG measures, just a variety of choices that make comparisons and analyses very challenging for v...
Article
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The COVID-19 pandemic has caused escalating levels of business, economic, and societal uncertainty and created extensive disruptions in the global market. The major research question of this study is how boards of directors can manage uncertainty in the post-COVID environment, especially in their duties as gatekeepers for both their own shareholder...
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The major research question of this paper is how boards of directors’ practices and performance can facilitate the new finance focus on sustainable, long-term value creation. This new finance focus presents opportunities to strengthen corporate performance which enhances the gatekeeper role of boards of directors in helping both shareholders and st...
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The major research question of this study is how boards of directors can monitor human resource reporting, especially with emerging reporting requirements from the U.S. Securities and Exchange Commission (SEC) for all domestic and foreign public companies listed on U.S. stock exchanges. Boards can develop advising and monitoring practices to help t...
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The COVID-19 global pandemic has created unique and far-reaching impacts on corporations. Given the essential oversight role of boards of directors, it becomes critical for them to develop strategies as their companies respond to the challenges and risks under these unprecedented circumstances. This paper applies corporate governance principles and...
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The major research question of this paper is to analyze climate change risk as a challenge to corporate governance. Climate action failure was the environmental risk most frequently listed in the top ten country risks. It also becomes a major reason that many companies are taking their own initiatives on climate change action which poses an imminen...
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Since many companies are making renewable energy commitments, boards of directors have responsibilities to monitor such commitments for enhanced corporate governance. This paper develops such board corporate social responsibilities for renewable energy commitments, especially in response to activist investors. In the existing literature, there are...
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The major research purpose of this paper is to identify the challenges for boards of directors concerning their responsibilities to assess and track their companies’ commitments to zero net emissions goals and performances. A major challenge for boards is to determine whether their companies are sincerely trying to reach zero net emissions or just...
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The key research aim of this paper is to analyze whether an activist investor’s recommendations for financial, corporate governance, and strategic management performances were successful or not. This paper updates the initial case study of the activist investor, Barington Capital Group, in analyzing the performance of a public company, L Brands, wh...
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The 2019 Business Roundtable Statement on the Purpose of a Corporation, endorsed by 183 CEOs of major U.S. companies, is not such a dramatic break from the past, but rather the next step in a steady retreat from a purely financial approach and an evolution to embrace a stakeholder approach, which is now gaining more and more lip service. The major...
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Artificial Intelligence technologies are predicted to contribute up to $16 trillion to the global economy by 2030. This rapid increase in AI development will have tremendous significance for all the major players for effective corporate governance and national leadership: boards of directors, owners, regulators, legislators, and the national public...
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The key research question of this paper is to explore the major implications for corporate governance from the emergence of long-term stockholder and stakeholder value perspectives for the purpose of a corporation. The major implication for corporate governance is the significant opportunity for boards of directors to play a vital role in helping c...
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Artificial intelligence (AI) has moved from theory into the global marketplace. The United Nations World Intellectual Property Organization released the first report of its Technology Trends series on January 31, 2019. It considered more than 340,000 AI-related patent applications over the last 70 years. 50 percent of all AI patents have been publi...
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The key question and major lessons learned in this research are that individual companies and their boards of directors could use the board director benchmarking information compiled in the Conference Board Report to assess their own boards of directors’ corporate governance practices. For an initial benchmarking approach, this paper compared a poo...
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The key research question of this paper is to explore the major implications for corporate governance from the emergence and perspective of passive investors. Passive investors care more about long-term governance practices than short-term financial metrics. They do not trade shares when accounting balances or stock prices fluctuate since they have...
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The major research question in this paper is how to provide guidance to board of directors’ audit committees in order to strengthen corporate governance. Audit committees have a direct responsibility to oversee the integrity of a company’s financial statements and to hire, compensate, and oversee the external auditor. Public focus, especially by ac...
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Stakeholder capitalism is the notion that a company focuses on meeting the needs of all of its stakeholders: customers, employees, partners, the community, and society as a whole. In August 2019, 183 of the 206 Business Roundtable (BR) companies signed the BR Statement of the Purpose of a Corporation advocating stakeholder capitalism beyond the tra...
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The dangers of not properly focusing upon cybersecurity risks were emphasized by recent, notorious attack and hack examples. With guidance from key sources, like the AICPA Cybersecurity Guide, cybersecurity strategies can be developed by corporate executives and Board of Directors to help thwart such attacks. An immediate trend for data security is...
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The major research question addressed by this paper is how to evolve corporate governance beyond its traditional shareholder focus towards the broader perspective of a stakeholder focus with intrinsic value. Intrinsic value refers to the monetary value of a company, stock, currency, or product determined by fundamental analysis, without reference t...
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The major research question, in the title of this paper, was answered positively for stock market performance. The companies with Ethics and Compliance Committees (ECC) outperformed the non-ECC companies on five-year annual averages for both profit margin and net income growth rate, which may mean Wall Street investors are emphasizing non-financial...
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The key question of this paper is what are the implications for corporate governance from the emergence of contemporary financial reporting and intangible resources? Going beyond traditional financial reporting, Boards of Directors and corporate executives should investigate the intangible resources of contemporary financial reporting. What intangi...
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The key research question of this paper is to explore the implications for both financial and corporate governance performances from the emergence of activist investors. This paper uses a dramatic case study of one specific activist investor’s role, Barington Capital Group, in analyzing the performance of a public company, L Brands, which lost $20...
Article
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The major research question in this paper is whether improved corporate political disclosure and accountability lead to improved stock market and financial performance. To explore this question, the paper first examines the corporate financial performance of companies ranked by the Center for Political Accountability (CPA), and finds no significant...
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The major research question or issue in this paper is to develop strategies for companies and Boards of Directors to seize opportunities from emerging technological advances, instead of being threatened by artificial intelligence (AI), gentrification, and other new technologies. For example, in 2019 Microsoft made a $500 million positive response t...
Conference Paper
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The major research question or issue in this paper is to develop strategies for companies and boards of directors to seize opportunities from emerging technological advances, instead of being threatened by artificial intelligence (AI), gentrification, and other new technologies. The major sections of this paper are gentrification, positive and nega...
Conference Paper
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The key research question of this paper is to explore the implications for both financial and corporate governance performances from the emergence of activist investors. This paper uses a case study of one specific activist investor’s role, Barington Capital Group, in analyzing the public company, L Brands (Barington, 2019; Haigh, 2019). In conclus...
Conference Paper
Full-text available
The key question of this paper is what are the implications for corporate governance from the emergence of contemporary financial reporting and intangible resources? Going beyond traditional financial reporting, Boards of Directors and corporate executives should investigate the intangible resources for contemporary financial reporting, because thi...
Article
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This paper provides a summary of current sustainability issues and trends, primarily from an application perspective, which contributes to the state of the art of scholarly literature with implications for improved corporate governance. A leading sustainability advocate for better corporate governance is Larry Fink, who is the CEO of BlackRock, the...
Article
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An initial set of seven procedures is developed for assessing a company’s common stock. A second set of ten procedures is developed for performing stealth or external financial (forensic) analysis on a company’s common stock. Also, a set of eight corporate governance principles, developed in secret over one year by 13 prominent CEOs of U.S. based,...
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Using agency theory, we explore the relationship between corporate governance mechanisms and bank risk. We employ panel data analysis to study the 97 largest European listed banks between 2006 and 2010, thereby covering the most recent international financial crisis. The results show that corporate governance mechanisms influence bank risk. During...
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For improved corporate governance in this age of digitalization, the Board of Directors could investigate key operating performance indicators or KPIs for competitive advantages with Digitalization Dashboards. There are over 30 such digital metrics in the Digitalization Dashboard example in this paper. A starting point for developing such key metri...
Article
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13 high profile CEOs of U.S. companies secretly worked for one year to develop corporate governance principles that would serve as a future pathway. They advocated their resulting document as being detailed and tough-minded with commonsense recommendations and guidelines about the roles and responsibilities of boards, companies, and shareholders. H...
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Boards of Directors will have to play a key role in the technological survival and development of companies by asking corporate executives about their plans and strategies for these emerging technological changes and challenges. Key challenges and opportunities discussed in this paper, with corresponding corporate governance implications, included...
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Risk management should be a key concern of board members to enhance corporate governance in any organization. Eleven key numbers, ratios, and models were advocated in this paper for risk management analyses, including an analysis of their variability with graphs. They are applied to Kaisa, a Chinese property developer, located in Shenzhen but incor...
Article
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Board of Directors’ compensation committees currently have no pay provisions requiring CEO or top executives’ compensation claw-backs for market capitalization destruction which could have huge impacts on such top executive pay. For example, CEO pay was correlated with market capitalization performance for 24 companies in the metal mining, primary...
Article
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This paper analyzes 15 of the largest EU public companies, including Volkswagen, that were included in Forbes’ 2015 list of “The World’s Biggest Public Companies” in order to investigate possible best practices for long-term sustainability, as emphasized by the EU Sustainability Directive. CEO pay and various well-known financial ratios were correl...
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Weak corporate governance facilitated over $1.5 trillion in investment losses in the 21st Century in just 17 primarily U.S. public companies. Sir David Tweedy, the former chair of the International Accounting Standards Board, has commented: “The scandals that we have seen in recent years are often attributed to accounting although, in fact, I think...
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With 21st century U.S. frauds destroying well over one trillion of market capitalization and now with Valeant’s 2016 market cap destruction of $86 billion, the question must again be asked: where were the gatekeepers (boards of directors, regulators, sell-side financial analysts, and auditors) to protect investors? Many of these frauds were caught...
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Sir David Tweedy, the former chair of the International Accounting Standards Board, observed: “The scandals that we have seen in recent years are often attributed to accounting although, in fact, I think the U.S. cases are corporate governance scandals involving fraud” (Tweedy, 2007). This paper will show that many of the recent Chinese cases of fr...
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The purpose of this research is to develop and apply risk management procedures to enhance corporate governance, using examples of Chinese company investments. Strategy and risk should be considered together by management and boards of directors as they need to know what risks are embedded in potential or approved strategies. Strategy and risk are...
Article
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By focusing on specific board variables, both company performance and stock market performance have been investigated and a more comprehensive corporate governance approach has been advocated to help improve such performances (Larcker et al. 2007 and Grove et. al. 2011). In this paper, we extend such analyses by investigating a relationship between...
Article
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CEO pay was correlated with market capitalization performance. Three simple correlation tests of 2013 total CEO pay with market capitalization destruction over the approximate three and one-half year period, January 2011 through July 2014, yielded a 66% weighted average moderate correlation for thirty-four companies. The total market cap destructio...
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These guidelines are developed for independent and competent Board Directors: Directors must have no material relationships with the company over the past year. Directors should have business savvy, a shareholder orientation, and a genuine interest in the company. Pay for performance, not presence, and use a mix of short and long-term performance m...
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This paper analyzes the corporate governance listing requirements of major global stock exchanges to assess the level of investor protection from investment disasters, such as corporate fraudulent financial reporting (e.g. Enron, Lehman Brothers, Satyam, and Parmalat) and the 2008 financial crisis which destroyed over $1 trillion in market capitali...
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This paper will examine five Chinese company stocks that have been listed on United States exchanges with either initial public offerings (IPOs) or reverse mergers, often called reverse take-overs (RTOs). Their shares were initially well received in the market, especially as China’s economy continued to grow at rates much higher than the rest of th...
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This article extends prior research on the relation between earnings quality (assessed by accruals) and future stock price returns and adds new research on the relationships between direct and indirect corporate governance mechanisms of control with accruals and future stock price returns. We study public companies of the Netherlands and find the p...
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In March 2008, the US government bailed out a failing Bear Stearns by arranging a sale to JP Morgan Chase, with US government guarantees for many Bear Stearns' toxic assets that came with the acquisition. In September 2008, the US government failed to bail out a failing Lehman Brothers, which then went into bankruptcy. Soon thereafter, the US gover...
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Risk management committees are now required for all U.S. financial institutions that are regulated by the U.S. Federal Reserve Bank. All U.S. public companies must now report their risk management activities for both Board of Directors and top management in their 10 K annual reports to the U.S. Securities and Exchange Commission (SEC). This paper a...
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In mid-March, 2008, with substantial government support, JP Morgan Chase agreed to acquire Bear Stearns for $10 per share. Because Bear's shares traded at $170 a year earlier, the market cap destruction of 94% was devastating to the once venerable investment bank and its investors. The Financial Crisis Inquiry Commission had also cited as failure t...
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International and U.S. banks should benefit from studying Countrywide Financial Corporation's business practices leading up to the 2008 financial crisis in order to develop lessons learned for improved risk management and corporate governance by both boards of directors and management. Especially for U.S. banks, the 2010 Dodd-Frank Act now requires...
Article
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This article extends prior research on the relation between earnings quality (assessed by accruals) and future stock price returns and adds new research on the relationships between direct and indirect corporate governance mechanisms of control with accruals and future stock price returns. We study public companies of the Netherlands and find the p...
Article
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The importance of structural corporate governance factors identified by the New York Stock Exchange’s 2010 Commission on Corporate Governance was reaffirmed here with various empirical and forensic studies. The key, recurring structural factors were all-powerful CEO (the duality factor and related Board independence issues), weak system of manageme...
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This study analyzes the quality of banks’ boards of directors across Europe and the United States (US). We investigate the interactions between the legal protection of investors and ownership concentration to explain the quality of boards at 190 of the largest publicly-traded US and European banks in 2005, well before the unraveling of the financia...
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Manuscript Type: Empirical Research Question/Issue: Does corporate governance explain US bank performance during the period leading up to the financial crisis? We adopt the factor structure by Larcker, Richardson, and Tuna (2007) to measure multiple dimensions of corporate governance for 236 public commercial banks. Research Findings/Insights: Find...
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This study examines whether bank risk is a factor influenced by chief executive officer (CEO) power and equity incentives and the interaction between these factors during 2005 through 2009 which marks the unraveling of the financial crisis. CEO power is measured with an index comprised of five underlying variables – CEO duality, a staggered board o...
Article
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This study examines whether bank risk is a factor influenced by chief executive officer (CEO) power and equity incentives and the interaction between these factors during 2005 through 2009 which marks the unraveling of the financial crisis. CEO power is measured with an index comprised of five underlying variables – CEO duality, a staggered board o...
Article
Whitetracks Design, Inc. is one of the leading U.S. manufacturers of snowshoes. The business is owned by three individuals who are contemplating whether it should be sold now or continue to be operated for a later sale at a potentially enhanced business value. All the Whitetracks owners are now in their early 60s and are hoping for a comfortable re...
Article
Full-text available
Whitetracks Design, Inc. is one of the leading U.S. manufacturers of snowshoes. The business is owned by three individuals who are contemplating whether it should be sold now or continue to be operated for a later sale at a potentially enhanced business value. All the Whitetracks owners are now in their early 60s and are hoping for a comfortable re...
Article
Full-text available
ICN Pharmaceuticals, Inc. (today Valeant Pharmaceuticals International) was a drug developer and manufacturer, known in the medical field for its development of Ribavirin, an antiviral compound used to treat various viral infections. However, ICN will probably be remembered mostly as an example of problematic and inefficient corporate governance. C...
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We provide evidence regarding the relationship between banks' corporate governance and both financial performance and quality of loans during the period, which led to the subprime mortgage crisis. First, we examine the association of 13 governance factors with U.S. banks' performance measured by quality of revenues, return on assets, and Tobin's Q....
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Prior research studies have examined the detection of fraudulent financial reporting using either financial ratios or nonfinancial factors relating to corporate governance. Are both types of factors relevant for such fraud detection? In this paper, we consider both types of factors, using experiences of fraudulent financial reporting companies as a...
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The recent fraudulent financial reporting by Enron, Qwest, and other companies was facilitated by poor corporate governance. As shown in this paper, ten timeless factors of corporate governance helped detect such reporting. Weak corporate governance facilitated both classic and recent financial reporting frauds, particularly the following factors:...
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In this article it is contended that methodological issues implicit in benchmarking studies have to be clearly appreciated by management in assessing the reliability of performance gaps and the identification of sound practices that can be successfully adopted by other firms. There is no doubt that organisational design aspects of the benchmarking...
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This instructional case is intended to introduce graduate and undergraduate financial accounting and finance students to derivatives using interest rate swaps. The major learning objective is to understand derivative accounting methods, using interest rate swaps, as proposed by the Financial Accounting Standards Board's recent Exposure Draft. A sec...
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This study uses a multi-disciplinary framework to hypothesize that firms' market values of intangible assets are significantly related to measures of firm reputation and form of executive compensation structure. Cross-sectional OLS tests with levels and first-difference data explain intangible asset values. Results are consistent across tests and g...
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Currently, a large number of diverse methodologies exist which apply to the measurement of human resources. This paper attempts to clarify and evaluate these methodologies by the application of a measurement theory frame of reference. The first two sections discuss the measurement theory perspective and then its application to human resource accoun...
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This article develops a strategy for maximizing percentage depletion de
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To auditors, investors, fund managers, short sellers, and other external users, fraud and bankruptcy models may serve as important tools in analyzing the financial information presented by companies. Along with the earnings management ratios, quality of earnings and quality of revenue (Schilit 2003), more elaborate models and metrics (Altman 1968 a...

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13 top CEOs of U.S. companies worked in secret for one year to develop 7 key principles of corporate governance. This paper shows how violations of these principles led to $1.5 trillion of investor losses in just 17 companies.