Learning from Positive Impact Organizations: A Framework for Strategic Innovation

In view of the significant global challenges, this article analyzes and suggests pragmatic solutions for organizations to transform from sustainability risk management to creating a positive impact. Positive impact is defined by products and services that are created with the purpose of solving societal problems. It reflects the shift from reducing an organization’s negative footprint to achieving a significant net positive impact on society and the planet. This article shows that such a mindset shift is observed on the level of the leadership and the organization. This explorative, case-based research validates the Dyllick–Muff BST typology and identifies strategic differentiators of Positive Impact Organizations, including their governance, culture, external validation, and a higher purpose reflected in their products and services. This research is translated into two tools for practitioners: the Strategic Innovation Canvas (SIC) and the Positive Impact Framework (PIF). The SIC serves as a quick assessment for organizations to get started. It consists of eight action dimensions: (1) sustainability in the organization, (2) transparency and board support, (3) leadership perspective, (4) targets and incentives, (5) societal stakeholders, (6) triple value reporting, (7) market framing, and (8) products and services. The PIF offers step-by-step guidance during the organizational transformation. The article sketches a new field of research for both scholars and practitioners in organizational transformation towards positive impacts. It bridges business sustainability and strategy through an innovation approach. By recognizing the importance of the underlying mindset shifts, it connects the fields of organizational and personal development.

Market Perceptions of Fair Value Reporting for Tangible Assets

This article examines equity market perceptions of fair value reporting for tangible assets. We identify six events—four designated as increasing, two as decreasing—affecting the likelihood of U.S. adoption of fair value reporting for investment property (i.e., real estate) assets, one of the largest asset classes in the world. Fair value adoption in the United States would facilitate convergence of one of the widest remaining disparities between U.S. reporting and International Financial Reporting Standards (IFRS): accounting for tangible investment property assets, where the United States (IFRS) requires depreciated historical cost (recognized or disclosed fair values). Using a sample of U.S. investment property firms, we document an average positive market reaction for movement toward fair value reporting. We further find predictable cross-sectional variation, with the market reaction increasing for firms with greater commitment to high-quality reporting, greater investor demand for fair values, higher financial risk, and staler asset values. Overall, the results are consistent with U.S. equity markets perceiving net benefits to movement toward a fair value reporting approach for this asset class.

Integrated Islamic Social Finance Approach

This chapter assesses the Islamic social financial approach by reviewing the concepts of nature, society, and environment of the current social reporting models such as triple bottom line and environmental, social, and governance (ESG) and integrated (corporate) value reporting. These are examined to analyse the limitations of the capital centric and profit motive focus of shareholder wealth approach. Based on the current ‘responsible investor' and ‘social responsibility investment' principles, the view of environment as ‘externality' has impeded the potential realization of social good from an ‘eclectic paradigm' of integrated reporting. An eclectic paradigm is adopted for the integrated Islamic social financial reporting approach by the internalization of environment as part of socio-economic goals to attain social harmony. It offers an opportunity for higher commitment to a more sustainable Islamic social finance development using the principles derived from Infaq, Sadaqah, Hiba, and Waqf. COVID-19 pandemic is particularly unique and to a certain extent has stalled profit motive commercial efforts to activate social funding responses. A more sustainable response is attainable from social market community-based system rather than market-based system. With Islamic social finance approach to COVID-19 pandemic, a more integrated, inclusive, and sustainable reporting is proposed.

Fair Value Accounting and Reporting, and Firm Value: Evidence from Quoted Deposit Money Banks in Nigeria

The study evaluated the effect of fair value reporting on financial profitability and firm value with focus on deposit money banks listed on the Nigerian Stock Exchange Using a sample of 13 banks quoted on the Exchange, the study employed secondary data gathered from published annual reports of eight years (four years pre-IFRS, historical value measurement and four years post-IFRS fair value measurement) 2008 to 2015. The study was anchored on the agency theory while descriptive analysis was employed to summarize data collected while SPSS Version 23 software and regression analysis were used to analyze data. The result support the hypothesis that fair value reporting does not significantly affect reported profitability. Fair value was however found to affect firm valuation. Overall, this study suggests that he study concludes that in order to effectively evaluate financial performance and position, knowledge of fair value is not enough. Users also need to know the historical cost of the investment. Therefore, companies should adopt a hybrid form of measurement (measurements which entail both fair and historical values) in reporting their activities to reflect actual value creation.