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Hyflux Ltd., a Singapore Exchange (SGX) listed sustainable water and energy solutions company, declared losses for the first time since its listing more than a decade ago, and expressed its inability to service its debt and pay distribution to holders of its perpetual capital securities and perpetual preference shares. These investors were in a state of shock and disbelief when barely 5 months later, in May 2018, Hyflux suspended the trading of its shares on SGX and opted for a court-supervised debt reorganisation process. Where had Hyflux, the erstwhile poster child of Singapore's innovation and entrepreneurship capabilities, erred?

In early January 2019, a recent Ivey Business School graduate logged into her online trading account to review her portfolio's performance. As she scanned her investments, she paused at one stock in particular. It was time to make a decision regarding one of her most volatile stocks-Valeant Pharmaceuticals International Inc., recently renamed Bausch Health Companies Inc. The pharmaceutical company was once celebrated for its innovative business approach. However, both its stock price and reputation as one of Canada's most valuable companies had plummeted in recent years, after accusations of price gouging and investigations for fraud by the US Securities and Exchange Commission. Overburdened with significant amounts of debt from a spree of acquisitions, the company was also scrutinized by investors and regulators for using non-GAAP accounting metrics for its financial statements. The recent graduate wondered if she should hold out hope that the stock would return to its historic highs, or if she should cut her losses and divest the stock.

In January 2015, an investor bought 1,000 shares of Bank of India stock when the banking sector was expected to perform better over the medium to long term. On October 11, 2019, after holding the shares for nearly five years, the investor was surprised to see that the stock price had instead dropped by almost 80 per cent. He was disappointed in his investment's performance to date, but the stock's current low price seemed a bargain, so he was contemplating buying more shares for overall cost averaging of his investment. Before making any investment decisions, however, he carefully analyzed the bank's annual reports for the previous five years and discovered an unusual change in the bank's accounting policy for the provisioning of non-performing assets. After his review of the bank's financial statements, the investor was unsure whether he should sell his shares, buy more shares to achieve overall cost averaging, or hold the number of shares he currently owned.

The case describes widespread misconduct at Wells Fargo Community Bank in the period leading up to 2017 and the company's subsequent attempts to improve internal controls, company culture, and corporate governance. The case examines the potential causes of large scale customer related fraud in the Community Banking Division and across a range of businesses. The extent and length of time over which these misconduct events took place suggested a company that was fundamentally unable to ensure a compliance culture and customer focus among its employees. The case describes in detail the systems and practices that led to the systematic failures. Faced with withering political and regulatory scrutiny the company embarked upon a series of initiatives to improve systems and structure to prevent such misconduct and improve culture. The case describes these initiatives and the challenges faced in implementing them. The case also focuses on the role of the board in overseeing and improving internal control and corporate culture. The case ends with discussing entry of a new CEO amidst board turnover in March 2020.

Businesses and economic systems are changing in response to global challenges, shareholder interests, and stakeholder interests. This book offers a guide for organizations to benefit from sustainable approaches. A historical overview of the concept of sustainability is given, specifically focusing on how sustainability applies to performance and reporting. In order to implement sustainability in a business, policies need to be developed that align with stakeholder expectations. When organizations are actively participating in multi-stakeholder initiatives, it is easier to align policies with societal trends. When policies are developed, management systems are vital in making sure the policies are congruent with actual performance. Performance reports should be based on well-recognized standards; regular reporting will help stakeholders evaluate an organization's performance and find out if performance is consistent with their expectations. Assets to developing stakeholder trust in performance and reporting include internal and external assurances. Potential actions for improvement are also discussed. Chapter 1 focuses on sustainability as a concept, gives models and definitions, and discusses its relationship to capitalism and its evolution. Capitalism needs to be reworked to include sustainability and stakeholders. Sustainability models take into consideration economic, environmental, and social aspects. The economic dimension focuses on products, services, and profit; the environmental looks at how economic and social activities can leave the planet with resources; the social works to see that all members of society share wealth and enjoy a high-quality life. These models suggest that, while profit is important for the economy, it should not be the only objective. Sometimes capitalism can cause more problems, but it should be designed in a way to solve societal problems.

Businesses and economic systems are changing in response to global challenges, shareholder interests, and stakeholder interests. This book offers a guide for organizations to benefit from sustainable approaches. A historical overview of the concept of sustainability is given, specifically focusing on how sustainability applies to performance and reporting. In order to implement sustainability in a business, policies need to be developed that align with stakeholder expectations. When organizations are actively participating in multi-stakeholder initiatives, it is easier to align policies with societal trends. When policies are developed, management systems are vital in making sure the policies are congruent with actual performance. Performance reports should be based on well-recognized standards; regular reporting will help stakeholders evaluate an organization's performance and find out if performance is consistent with their expectations. Assets to developing stakeholder trust in performance and reporting include internal and external assurances. Potential actions for improvement are also discussed. Chapter 2 discusses sustainability reporting and its relationship with sustainability performance. If a company does not report its performance, stakeholders will face obstacles in their decision making, and the company itself misses an opportunity to learn about its own performance. Sustainability performance and reporting change in response to sustainability disasters. The Bhopal gas leak and the Exxon Valdez oil spill are described as well as how they motivated change in performance and reporting. Many sustainability reporting guidelines have been created over the years, some of which cover all organizations while others focus on a specific sustainability aspect. The GRI offers the most broad-based set of sustainability reporting standards used for stand-alone reports.

Businesses and economic systems are changing in response to global challenges, shareholder interests, and stakeholder interests. This book offers a guide for organizations to benefit from sustainable approaches. A historical overview of the concept of sustainability is given, specifically focusing on how sustainability applies to performance and reporting. In order to implement sustainability in a business, policies need to be developed that align with stakeholder expectations. When organizations are actively participating in multi-stakeholder initiatives, it is easier to align policies with societal trends. When policies are developed, management systems are vital in making sure the policies are congruent with actual performance. Performance reports should be based on well-recognized standards; regular reporting will help stakeholders evaluate an organization's performance and find out if performance is consistent with their expectations. Assets to developing stakeholder trust in performance and reporting include internal and external assurances. Potential actions for improvement are also discussed. This chapter looks at how organizations begin their sustainability journeys and the importance of engaging stakeholders throughout that journey. Sustainable companies link policies to performance, both of which are consistent with the needs and desires of stakeholders. Participating in multi-stakeholder initiatives can connect policy to stakeholders' needs and desires, while sustainability reporting can connect performance to them. Policies need to consider how the values of stakeholders differ regarding short-term versus long-term thinking, self-interest versus community interest, and value placed on humans versus other life forms. Many universal policies give businesses good direction for their sustainability journeys, but most of these policies and the principles they suggest need to be customized to the individual organization and its stakeholder needs.

Businesses and economic systems are changing in response to global challenges, shareholder interests, and stakeholder interests. This book offers a guide for organizations to benefit from sustainable approaches. A historical overview of the concept of sustainability is given, specifically focusing on how sustainability applies to performance and reporting. In order to implement sustainability in a business, policies need to be developed that align with stakeholder expectations. When organizations are actively participating in multi-stakeholder initiatives, it is easier to align policies with societal trends. When policies are developed, management systems are vital in making sure the policies are congruent with actual performance. Performance reports should be based on well-recognized standards; regular reporting will help stakeholders evaluate an organization's performance and find out if performance is consistent with their expectations. Assets to developing stakeholder trust in performance and reporting include internal and external assurances. Potential actions for improvement are also discussed. Chapter 4 explores the role of management systems in linking policy with performance. Governance is needed at all organizational levels in order to fulfill sustainability objectives. These levels include strategic (long-term), tactical (one year), and operational (day to day). Management systems have both formal and informal components. Formal components include organizational structure, responsibilities, and procedures, while informal components include values, trust, and leadership. Commitment and capability must also happen at all organizational levels of management systems. To develop commitment, organizations need to communicate what is important, delegate responsibility for what is important, and reward what is important.

Businesses and economic systems are changing in response to global challenges, shareholder interests, and stakeholder interests. This book offers a guide for organizations to benefit from sustainable approaches. A historical overview of the concept of sustainability is given, specifically focusing on how sustainability applies to performance and reporting. In order to implement sustainability in a business, policies need to be developed that align with stakeholder expectations. When organizations are actively participating in multi-stakeholder initiatives, it is easier to align policies with societal trends. When policies are developed, management systems are vital in making sure the policies are congruent with actual performance. Performance reports should be based on well-recognized standards; regular reporting will help stakeholders evaluate an organization's performance and find out if performance is consistent with their expectations. Assets to developing stakeholder trust in performance and reporting include internal and external assurances. Potential actions for improvement are also discussed. This chapter discusses the role of indicators in sustainability reporting. Multiple similarities between sustainability reporting and financial accounting and reporting are given. For example, similar to financial accounting, narrative qualitative discussion helps to enhance disclosure of sustainability performance and to interpret quantitative indicators. Engagement between policy and stakeholders can help identify important topics for reporting performance. The idea of SMART indicators is described. Topics that are material can fall into three different categories: economic, environmental, and social. In order to develop a comprehensive performance measurement system, companies should use a mix of input, output, outcome, and impact indicators. Input and output represent efficiency; outcome and impact represent effectiveness.

Businesses and economic systems are changing in response to global challenges, shareholder interests, and stakeholder interests. This book offers a guide for organizations to benefit from sustainable approaches. A historical overview of the concept of sustainability is given, specifically focusing on how sustainability applies to performance and reporting. In order to implement sustainability in a business, policies need to be developed that align with stakeholder expectations. When organizations are actively participating in multi-stakeholder initiatives, it is easier to align policies with societal trends. When policies are developed, management systems are vital in making sure the policies are congruent with actual performance. Performance reports should be based on well-recognized standards; regular reporting will help stakeholders evaluate an organization's performance and find out if performance is consistent with their expectations. Assets to developing stakeholder trust in performance and reporting include internal and external assurances. Potential actions for improvement are also discussed. Chapter 6 explores what qualities in a sustainability report make it credible in the eyes of stakeholders. These qualities include stakeholder engagement or inclusiveness to determine which topics are most important to them and which topics have the greatest impact on the company. When there seems to be a gap between promises and delivery and when that gap is not explained, credibility is questioned. Financial reporting and sustainability reporting are compared by looking at similar characteristics that make them credible and useful. Many of the characteristics are interdependent. Reporting results from year-to-year, against targets, and against benchmarks supports comparability, which in turn allows for assessment of performance against similar organizations.

Businesses and economic systems are changing in response to global challenges, shareholder interests, and stakeholder interests. This book offers a guide for organizations to benefit from sustainable approaches. A historical overview of the concept of sustainability is given, specifically focusing on how sustainability applies to performance and reporting. In order to implement sustainability in a business, policies need to be developed that align with stakeholder expectations. When organizations are actively participating in multi-stakeholder initiatives, it is easier to align policies with societal trends. When policies are developed, management systems are vital in making sure the policies are congruent with actual performance. Performance reports should be based on well-recognized standards; regular reporting will help stakeholders evaluate an organization's performance and find out if performance is consistent with their expectations. Assets to developing stakeholder trust in performance and reporting include internal and external assurances. Potential actions for improvement are also discussed. Chapter 7 discusses the role of assurances in sustainability performance and the reporting of sustainability performance. Assurances can come from an internal or external review or audit. Internal assurances are carried out by the organization's own employees and ensure that personnel are committed and capable at all organizational levels. External assurances are performed by people who are not employed by the organization and can be limited (negative) or reasonable (positive). Teams for both internal and external assurances need members from various areas of expertise. Internal assurances tend to be proactive, while external assurances tend to be reactive. However, because providers typically give feedback on ways to improve, assurance of any kind improves performance and provides credibility.

Businesses and economic systems are changing in response to global challenges, shareholder interests, and stakeholder interests. This book offers a guide for organizations to benefit from sustainable approaches. A historical overview of the concept of sustainability is given, specifically focusing on how sustainability applies to performance and reporting. In order to implement sustainability in a business, policies need to be developed that align with stakeholder expectations. When organizations are actively participating in multi-stakeholder initiatives, it is easier to align policies with societal trends. When policies are developed, management systems are vital in making sure the policies are congruent with actual performance. Performance reports should be based on well-recognized standards; regular reporting will help stakeholders evaluate an organization's performance and find out if performance is consistent with their expectations. Assets to developing stakeholder trust in performance and reporting include internal and external assurances. Potential actions for improvement are also discussed. This chapter offers a review of key points in the model for organizational sustainability and explores how to improve performance and reporting in the future. Steps an organization would take on its sustainability journey are described along with considerations for accomplishing each step and an example of implementing each step. When it comes to reporting, companies typically prepare a stand-alone sustainability report or an integrated report, but some put forth specialized, customized requests instead of using the company's sustainability report for needed information. Large proactive multinational companies may also try to predict what information stakeholders will ask for and then put that information on their website.

This case, based on general business experience, casts students in the role of analyzing the financial effects of a possible outsourcing decision. Lee and Marcia Mills, owners of LeMar Outdoor Play Products, Ltd. (LOPP), a Canadian company that designs, manufactures, and installs outdoor play equipment, are faced with a decision pertaining to whether LOPP should outsource the company's back-office information technology enabled services (IT-ES) functions. Lee engages with an outside advisory firm specializing in matching companies with suitable outsourcing partners in India, and eventually a contract is presented. From just a financial perspective, students must ascertain whether Lee and Marcia should accept the outsourcing offer.

In October 2001, the co-founder and vice-president of Veritas Investment Research Corporation (Veritas), was considering his next steps as he prepared to issue a highly critical report on Bombardier Inc. (Bombardier). The vice-president believed that Bombardier had relied upon accounting innovations rather than operating innovations in order to report accounting profits. While numerous issues concerned the vice-president, one of the most critical was the way the company had managed the relationships between its various operating segments. These issues had developed over recent years and threatened to increase following the business decisions in the wake of September 11, 2001, which had dramatically affected the sale of aircraft. The vice-president's investment report would have significant consequences for numerous stakeholders and would affect both his own and Veritas's reputations. How should Veritas interpret the various issues related to Bombardier's accounting and reporting choices?

In October 2001, the co-founder and vice-president of Veritas Investment Research Corporation (Veritas), was considering his next steps as he prepared to issue a highly critical report on Bombardier Inc. (Bombardier). The vice-president believed that Bombardier had relied upon accounting innovations rather than operating innovations in order to report accounting profits. While numerous issues concerned the vice-president, one of the most critical was the way the company had managed the relationships between its various operating segments. These issues had developed over recent years and threatened to increase following the business decisions in the wake of September 11, 2001, which had dramatically affected the sale of aircraft. The vice-president’s investment report would have significant consequences for numerous stakeholders and would affect both his own and Veritas’s reputations. How should Veritas interpret the various issues related to Bombardier’s accounting and reporting choices?

In May 2020, an analyst was assessing eHealth's performance. eHealth was an online / tele-sales broker of health insurance products. The stock had recently hit all-time highs, closing at a peak of $146 on March 4, 2020. But now, May 4, 2020, eHealth traded at $103. The recent fall had wiped nearly $1.0B from the company's market capitalization because well-known short seller Carson Block had released a short-report on the company. Carson Block argued that eHealth's management had undertaken "massive stock promotion." In the report, Block said that eHealth's adoption of the new revenue recognition standard - ASC 606 - inflated revenue and masked the fact that eHealth was losing money on each new policy that it sold. Still, eHealth's valuation remained elevated at 3.3x FY2021E Revenue, 21x FY2021E adjusted net income, even assuming away accounting uncertainty. In addition, the mean consensus share price target as of May 4, 2020 was $179. Did the latest news provide a buying opportunity? Or was it best to avoid eHealth, even perhaps consider shorting the company?

In early 2020, a recent graduate from a prestigious masters of business administration program was working as a financial accountant for a renowned private equity firm in Glasgow, Scotland. For her father's retirement, she was considering a gift from Highland Malt Inc.. The company's Scotch whisky was offered in a limited quantity and promoted as an investment opportunity. Unlike ordinary bottled whiskies, Highland Malt Inc. sold this new line solely by the barrel. Collectors had to pay the full amount of CA$10,000 upfront, but could request a full refund within 180 days if unsatisfied with the product. The refund period allowed the collector to visit the distillery and inspect the purchase to ensure it met all expectations. The accountant was wondering if she should proceed with her plan to buy a barrel of Highland whisky as an investment and collector's item for her father.

In 2019, the director of strategy at US-based First Financial Group (FFG) needed to decide which alternative incentive program the mid-sized bank should use to replace its current short-term incentive plan (STIP) for branch employees. The scorecard-driven STIP was found to have motivated branch sales staff to set up unauthorized accounts in order to obtain bonuses. These actions could potentially bring negative publicity and regulatory penalties to the bank in an industry fraught with such problems. Further, the current STIP had led to conflicts between the branch managers, who were compensated based on dollar sales, and the employees, who were compensated based on units of accounts sold. However, the path forward was not clear. The strategy director could revise the current scorecard or introduce a team-based incentive based on a new scorecard. Regardless of which option was chosen, the bank would have to implement additional management controls to motivate its employees while reducing the risk of fraud.

In March 2020, as coronavirus reduced demand for air travel, an analyst was forecasting American Airlines' (American's) first quarter financial results. To develop a forecast, she needed to familiarize herself with Accounting Standards Update (ASU) 2016-02, "Leases (Topic 842)," passed four years earlier by the Financial Accounting Standards Board. ASU 2016-02 required companies to disclose all leases on their balance sheets, but it made an exception for leases with variable payments, allowing companies to leave such leases off-balance sheet. The Wall Street Journal estimated that more than 50% of American's leases remained off-balance sheet due to the exclusion of variable leases. Should American and other companies be allowed to leave variable lease payments off-balance sheet? How did the decision to leave these payments off-balance sheet affect companies' risk profiles and valuations?