Putting integrity Into Finance: A Purely Positive Approach

Abstract

for their willingness to share their efforts, knowledge and insights into matters relevant to this paper, and especially Kevin Murphy for his insightful challenges, questions, and comments on this paper, and his willingness to share with us his knowledge, data and exhibits relevant to executive compensation. We acknowledge our students and seminar participants for their contribution to us, in particular the critical lessons about the viability of the material and the methodology for mastering it. We are also indebted to two anonymous referees for their valuable comments, criticisms, and suggestions. All errors are our responsibility. Jensen has received financial support from the Harvard Business School Division of Research. Both authors are associated with the non-profit Erhard-Jensen Ontological / Phenomenological Initiative (from which the authors receive no financial benefit other than a reimbursement of travel expenses when dealing with the Initiative's activities). The purpose of the Initiative is to stimulate and support research into and the application of the ontological / phenomenological perspective on human nature and behavior, and the impact of such a perspective on life, living, and self. Various management consulting and public program delivery firms (some from which the authors derive a financial benefit) utilize some of the ideas presented in this paper in their consulting activities or programs. The views expressed herein are those of the authors and do not necessarily reflect the views of the National Bureau of Economic Research.NBER working papers are circulated for discussion and comment purposes. They have not been peerreviewed or been subject to the review by the NBER Board of Directors that accompanies official NBER publications.© 2014 by Werner Erhard and Michael C. Jensen. All rights reserved. Short sections of text, not to exceed two paragraphs, may be quoted without explicit permission provided that full credit, including © notice, is given to the source. ABSTRACTThe seemingly never ending scandals in the world of finance with their damaging effects on value and human welfare (that continue unabated in spite of all the various efforts to curtail the behavior that results in those scandals) argues strongly for an addition to the current paradigm of financial economics. We summarize here our new theory of integrity that reveals integrity as a purely positive phenomenon with no normative aspects whatsoever. Adding integrity as a positive phenomenon to the paradigm of financial economics provides actionable access (rather than mere explanation with no access) to the source of the behavior that has resulted in those damaging effects on value and human welfare, thereby significantly reducing that behavior. More generally we argue that this addition to the paradigm of financial economics can create significant increases in economic efficiency and productivity.

Crime, Punishment and the Halo Effect of Corporate Social Responsibility

“…On the other hand, some have argued there is not enough CSR because stock markets are too short-termist (Bolton and Samama, 2013) and do not place enough value on the intangible aspects of CSR (Edmans, 2011). More broadly, our paper contributes to a burgeoning literature on moral finance as argued for in Haidt, Hirshleifer, and Teoh (2013) and Erhard and Jensen (2013) and also the already important literature of behavioral corporate finance (see Baker and Wurgler (2011) for a survey).…”

Kesan Moderator Kearifan Tempatan dalam Mempertingkatkan Prestasi Pekerja di Indonesia

“…Prestasi pekerja yang tinggi boleh dicapai jika pekerja memiliki kompetensi, integriti, disiplin kerja dan motivasi kerja yang tinggi serta ganjaran yang setimpal dan reka bentuk kerja yang terperinci (Wickramasinghea & De Zoyza 2011;Erhard & Jensen 2012;Adomi & Eruvwe 2004;Garg & Rastogi 2006).…”

Social Capital, Trust, and Firm Performance: The Value of Corporate Social Responsibility during the Financial Crisis

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