When: Monday, October 23, 2023, 4:00 PM - 5:00 PMWhere: Online
The London Financial Regulation Seminar is an inter-collegiate and inter-disciplinary group of experts led by CCLS and our Institute of Banking and Finance under the leadership of Professor Rosa M. Lastra and Dr. Daniele D’Alvia.
On Monday 23 October 2023, Dr. Dov Solomon and Dr. Rimona Palas will discuss their last research on ESG Regulation and Financial Reporting Quality. Prof. Lastra and Dr. D’Alvia will chair the event, and Dr. Katrien Morbee will be the discussant.
Dr. Dov Solomon is a Senior Lecturer and academic director of the LL.M. programme at the College of Law and Business, Ramat-Gan Law School, Israel. He served as a visiting scholar at the Harvard Law School Program on Corporate Governance, the University of Michigan Law School, and the University of Padova, as well as a visiting professor at the University of Kassel. His research areas include corporate law, securities regulation, securitisation, corporate governance, commercial law, and secured transactions.
Dr. Rimona Palas is the head of the accounting department at the College of Law and Business in Ramat-Gan, Israel. She received her BA Degree in accounting from Haifa University, Israel and her MBA and Ph.D. from Rutgers University in New Jersey. Her research interests include financial statement quality, financial statement analysis, and artificial intelligence.
Dr. Katrien Morbee is a Lecturer in Banking and Finance Law at the Centre for Commercial Law Studies, Queen Mary University of London. She teaches Corporate Finance Law, Mergers & Acquisitions, Art and Money, and Sustainbility and the Corporation. She wrote a DPhil in Law and Finance at the University of Oxford, under supervision of Prof. John Armour and Prof. Dan Awrey. She is a member of the European Corporate Governance Institute. Katrien holds an LLB and LLM from Ghent University, Belgium, and an LLM from Yale University, United States.
The growing significance of corporate environmental, social, and governance (ESG) policies sparked discussions on whether companies should be mandated to provide non-financial ESG disclosures. A major concern is that companies use high ESG ratings to divert attention from poor financial performance. Looking at publicly traded US companies from 2012 to 2022, the distinguished speakers of this conference examine whether companies exploit interest in ESG performance to distract investors from poor financial reporting.
They found out that high ESG ratings do not come at the expense of financial reporting quality. Higher ESG scores relate positively with earnings persistence and cash flow prediction, suggesting that companies with strong ESG performance generate higher quality of financial statements. These companies also demonstrate a negative association with the number of financial report restatements, indicating a reduced need for revising financial information. Furthermore, they found out that the heightened focus on ESG performance as of the 2019 Business Roundtable declaration had a positive impact on these relationships. Their findings suggest that regulation mandating non-financial ESG disclosures are likely to improve financial reporting quality.