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On May 2, 2013, the RAND Corporation convened a symposium, "Culture, Compliance and the C-Suite: How Executives, Boards and Policy-Makers Can Better Safeguard Against Misconduct at the Top," to stimulate a broad conversation about the challenges posed by executive misconduct (e.g., episodes of fraud, malfeasance, unethical behavior) at the level of the chief executive, financial, and other officers (sometimes called the C-suite). The symposium conversation also focused on the risk factors that contribute to executive misconduct and on practical steps that could be taken to strengthen compliance and ethical tone at the C-suite level and the unique roles of directors, top executives, chief ethics and compliance officers (CECOs), and government regulators and policymakers in pursuing those steps. Prior to the symposium, several of the invited participants were asked to prepare and present formal remarks on corporate culture, compliance, and the C-suite. Their white papers, distributed in advance of the event, represent varied perspectives on law enforcement, organizational behavior, and compliance activity, all relating to instances of C-suite misconduct. The speakers presented their remarks during the first session of the symposium. The second and third sessions engaged the symposium participants in interactive discussions, launching from the foundational remarks initially offered by the white-paper authors. These proceedings summarize the discussion and include the white papers.

Business ethics --- Corporations --- Corporate governance --- Corrupt practices --- Prevention

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Fair value accounting (FVA) refers to the practice of updating the valuation of assets or securities on a regular basis, ideally by reference to current prices for similar assets or securities established in the context of a liquid market; historical cost accounting (HCA) instead records the value of an asset as the price at which it was originally purchased. In the wake of the 2008 financial crisis, conflicting arguments have been made about the contributions of valuation approaches in triggering the crisis. This report investigates and clarifies the relationship between these two accounting approaches and risks to the financial system. The authors examine the risk implications of FVA and HCA in the various situations in which each is used; assess the role that these accounting approaches have played historically in financial crises, including the 2008 financial crisis, the savings and loan crisis of the 1980s, and the less developed country debt crisis of the 1970s; and explore insights about systemic risk that can be gleaned from better understanding the accounting approaches. The authors find that FVA was probably not a primary driver of the 2008 crisis. Moreover, they suggest that neither FVA nor HCA is objectively ⁰[MARC+62][MARC+65][MARC+74][MARC+74][MARC+65][MARC+72]⁰₊ than the other. Instead, both accounting approaches can provide useful information for different contexts when applied rigorously, but when they are implemented poorly or when regulatory oversight is weak, both FVA and HCA can produce misleading information that can increase systemic risk across the financial sector. The authors conclude with a series of recommendations for how FVA and HCA, and the financial information that both methods generate, can be improved to better protect against systemic risk to the banking sector in the future.

Fair value --- Accounting.