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Youmans, Timothy John

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Youmans

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Timothy John

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Youmans, Timothy John

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Now showing 1 - 3 of 3
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    Implied Materiality and Material Disclosures of Credit Ratings
    (2015-04-14) Eccles, Robert; Youmans, Timothy John
    This first of three papers in our series on materiality in credit ratings will examine the materiality of credit ratings from an “implied materiality” and governance disclosure perspective. In the second paper, we will explore the materiality of environmental, social, and governance (ESG) factors in credit ratings’ methodologies and introduce the concept of “layered materiality.” In the third paper, we will evaluate current and potential credit rating agency (CRA) business models based on our analysis in the previous papers, and introduce the concept of “institutionalized materiality.” Starting with this paper, and in the rest of the series, we will also recommend how the credit rating model can be enhanced in the coming years to help build more sustainable credit markets. This first paper is focused on the “G” (governance) component of ESG reporting. The governance matters we identify in this paper must be addressed before turning our attention to the broader set of ESG considerations in credit ratings. Failure to put these important governance matters at the top of the credit ratings reform agenda would, in our opinion, undermine the efforts we will recommend in our second and third papers.
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    Materiality in Corporate Governance: The Statement of Significant Audiences and Materiality
    (2015-09-01) Eccles, Robert; Youmans, Timothy John
    Under the prevailing ideology of “shareholder primacy” most boards of directors believe that they are prevented from considering stakeholders other than shareholders in determining material issues and materiality for strategy and reporting. New research is showing that legal foundations exist for directors to indeed consider other stakeholders. To many boards, this is new thinking. In order to assist boards in this new realm of taking into account multi-stakeholder significance, we have structured this paper in four parts and a conclusion. In Part I we review fiduciary duty focusing on to whom this duty is owed. In Part II, we review the relevance of materiality in corporate governance. In Part III, we review our audience-focused materiality determination approach and in Part IV we discuss the new idea of an annual board “Statement of Significant Audiences and Materiality.” We conclude with some preliminary research results, ideas for future research, and next steps.
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    The Climate Custodians
    (2016-07-20) Eccles, Robert; Youmans, Timothy John
    Can custody banks become key players in climate change? Custody banks joining the battle against climate change will signal a significant shift in governance ideology for this highly regulated industry so critical to the global financial system. While global custody banks provide the unseen but essential support system that ensures the proper functioning of the capital markets, they have great untapped potential to become change-makers in climate change. This paper expands on our idea of the “Climate Custodians” first presented in the MIT Sloan Management Review within the governance context of the “Statement of Significant Audiences and Materiality (The Statement)” for these subsidiaries of large bank holding companies. By focusing on the Big Three global custody banks — State Street, BNY Mellon, and JPMorgan Chase — we make the case for large custody banks assuming the role of climate custodians. In this role, these banks would report, among other things, a measure of carbon embedded within their institutional clients’ assets under custody to help clients understand the climate risk in their portfolios.