V O LU M E 2 5 | N U M B E R 3 | S U M MER 2 0 1 3

In This Issue: Investors and Sustainability

A Tale of Two Stories: 8 Robert G. Eccles and George Serafeim,

Sustainability and the Quarterly Earnings Call Harvard Business School

ESG Investing in Graham and Doddsville 20 by Dan Hanson, Jarislowsky Fraser USA

Three Common Misconceptions About Markets 32 Tim Koller, Bin Jiang, and Rishi Raj, McKinsey & Company
(or Why Earnings Smoothing, Guidance, and Concern About Meeting
Consensus Estimates Are Likely to be Counterproductive)

How to Create Value Without Earnings: The Case of Amazon 39 Josh Tarasoff, Greenlea Lane Capital, and John McCormack

Responsible Investors: Who They Are, What They Want 44 Steve Lydenberg, Domini Social Investments LLC

Corporate Disclosure of Material Information: 50 Jean Rogers, Sustainability Accounting Standards Board,
The Evolution—and the Need to Evolve Again and Robert Herz, Financial Accounting Standards Board

New Venture: A New Model for Clean Energy Innovation 56 Tiffany Clay, TPG

Integrating Sustainability Into Capital Markets: 62 Andrew Park and Curtis Ravenel, Bloomberg LP
Bloomberg LP And ESG’s Quantitative Legitimacy

Financial Institutions and Non-Governmental Organizations: 68 Steve Waygood, Aviva Investors

An Advocacy Partnership for Sustainable Capital Markets?

Preserving Value through Adaptation to Climate Change 76 Jason West and Robert Bianchi, Griffith University

Loyalty-Shares: Rewarding Long-term Investors 86 Patrick Bolton, Columbia University, and Frédéric Samama,
SWF Research Initiative and Amundi
How to Create Value Without Earnings:
The Case of Amazon

by Josh Tarasoff, Greenlea Lane Capital, and John McCormack

[Link]’s stock price recently hit a record of management has clearly and consistently communicated the

B
A $300 per share, giving the company a market
capitalization of approximately $140 billion.1 But
it was just a few months ago that a popular finan-
company’s goal of maximizing its long-run intrinsic value,
regardless of the effects on GAAP metrics. Perhaps the most
succinct description of this approach came from Jeff Bezos
cial journalist expressed his amazement at the disjunction in his first letter to Amazon’s public shareholders, in 1997:
between the company’s extraordinary share-price perfor-
mance and its reported earnings and profit margins: When forced to choose between optimizing the appearance
of our GAAP accounting and maximizing the present value of
Amazon kept up its streak of being awesome this afternoon by future cash flows, we’ ll take the cash flows.
announcing a 45 percent year-on-year decline in profits measuring
Q4 2012 against Q4 2011. Not because sales went down, mind In the 2004 shareholder letter, Bezos explains the distinc-
you. They’re up. Revenue is up. The company’s razor-thin profit tion between earnings and cash flow:
margins just got even thinner, and in total the company lost $39
million in 2012. The company’s shares are down a bit today, but the Why not focus first and foremost, as many do, on earnings,
company’s stock is taking a much less catastrophic plunge ……That’s earnings per share or earnings growth? The simple answer is that
because Amazon, as best I can tell, is a charitable organization earnings don’t directly translate into cash flows, and shares are
being run by elements of the investment community for the benefit worth only the present value of their future cash flows, not the
of consumers. The shareholders put up the equity, and instead of present value of their future earnings.
owning a claim on a steady stream of fat profits, they get a claim on
a mighty engine of consumer surplus. Amazon sells things to people In the 2012 shareholder letter, Bezos emphasizes the
at prices that seem impossible because it actually is impossible to importance of taking a long-term perspective on intrinsic value:
make money that way. And the competitive pressure of needing to
square off against Amazon cuts profit margins at other companies, As I write this, our recent stock performance has been
thus benefiting people who don’t even buy anything from Amazon. positive, but we constantly remind ourselves of an important
point – as I frequently quote famed investor Benjamin Graham
In our view, this commentary reflects the confusion in our employee all-hands meetings – “In the short run, the
that often results from equating GAAP accounting metrics, market is a voting machine but in the long run, it is a weighing
especially earnings per share, with financial success. There is machine.” We don’t celebrate a 10% increase in the stock price
no simple, linear relationship between GAAP earnings and like we celebrate excellent customer experience. We aren’t 10%
intrinsic value. A big part of the reason that GAAP earnings smarter when that happens and conversely aren’t 10% dumber
attract the attention of commentators is simply convenience: when the stock goes the other way. We want to be weighed, and
GAAP is the de facto reporting standard, so it’s easy to refer- we’re always working to build a heavier company.
ence and talk about. To be sure, a standardized set of metrics,
like earnings, provides a useful starting point for analysis. But In downplaying GAAP earnings and short-term stock
precisely because the measure we call earnings is standardized price movements, Amazon’s approach is entirely consistent
across so many different kinds of companies and business with standard finance theory, as well as the fundamen-
models, adjustments to earnings are often necessary to get at tal valuation analysis and classic value investing approach
economic reality. Though such adjustments require subjec- advocated by Benjamin Graham and David Dodd. The most
tive judgment, they nonetheless can be central to analysis of famous practitioner of this approach, Warren Buffett, defines
a company’s operating performance and valuation. intrinsic value (in his “Owner’s Manual” for Berkshire Hatha-
Since Amazon’s beginning as a public company, its way shareholders) as “the discounted value of the cash that

1. Amazon stock reached $300 per share for the first time on July 11, 2013.

Journal of Applied Corporate Finance • Volume 25 Number 3 Summer 2013 39

can be taken out of a business during its remaining life.” Amazon’s geographic growth has been equally impres-
We believe that Amazon has done a superb job of build- sive. Today, over 40% of the company’s revenues are derived
ing shareholder wealth by acting single-mindedly to maximize outside of North America, as a result of aggressive expansion
long-run “free cash flow” per share. It has done so through in Europe and Asia. The table below lists the country launches:
aggressive reinvestment of cash flow at high rates of return on
invested capital. In what follows, we provide a framework for 1998 UK, Germany
thinking about Amazon’s underlying profitability, and how 2000 France, Japan
that profitability has been masked by GAAP accounting. We 2002 Canada
show that Amazon is now investing large amounts of capital at 2004 China
a rate of return that is well above its cost of capital. Finally, we 2010 Italy
argue that if this can continue over the long term, Amazon’s 2011 Spain
current market value of $140 billion can be readily justified.
Finally, it is worth mentioning a non-retail business called
Historical Growth Trajectory Amazon Web Services (AWS), which was launched in 2006 to
Since its founding in 1995, Amazon has transformed itself deliver technology infrastructure as a set of services. Instead of
from an online bookstore into a dominant online retailer, using internal resources for computing needs (such as compute
offering a vast array of products across numerous categories. It power, data storage, databases, etc.), customers rent capacity on
is now one of the largest mass merchants in the world (online AWS. Today, AWS is the clear leader in the burgeoning “infra-
or offline), and by far the fastest growing. The table below structure-as-a-service” market, serving hundreds of thousands
shows net sales growth over the past decade: of customers in 190 countries. Anecdotal evidence suggests that
Net Sales ($ billions) Y/y Growth the vast majority of technology startups run on AWS, while the
roster of established organizations using the services includes
2003 5.3 34% blue-chip companies such as Eli Lilly and The New York Times,
2004 6.9 32% technology leaders such as Netflix and Twitter, as well as over
2005 8.5 23%
500 government agencies and over 2,000 academic institutions.
2006 10.7 26%
2007 14.8 39%
2008 19.2 29% Growth Depresses Margins
2009 24.5 28% To state the obvious, Amazon has been in hyper-growth
2010 34.2 40% mode since its founding. The investments required to
2011 48.0 41% produce this growth—in personnel, software, data centers,
2012 61.1 27% fulfillment centers, and so on—have burdened the income
statement, if not as expenses, then through depreciation and
A primary factor behind this growth has been expansion amortization of assets. As a result, Amazon’s reported oper-
into new categories and geographies, as well as the launch ating profit margins (EBIT as a percentage of sales) have
of innovative programs for customers. Listed below are the trended downward over time, and have been significantly
launches of categories and selected programs (italicized) in the lower than those of its slower-growing, offline competitors.
U.S.: For example, whereas Amazon’s operating margins in 2011
and 2012 dropped below 2%, Walmart and Target consis-
1995 Physical media tently report 6% and 7% operating margins, respectively.
1999 Electronics, toys, baby, tools & hardware
2000 Home & garden EBIT ($ millions) % of net sales
2002 Apparel
2003 Sports & outdoors, jewelry & watches, health &
2003 271 5.1%
personal care
2004 Beauty 2004 440 6.4%
2005 Shoes & accessories 2005 432 5.1%
2006 Dry goods, auto parts & accessories, Amazon Prime 2006 389 3.6%
2007 Kindle device & store, AmazonFresh (Seattle pilot) 2007 655 4.4%
2008 Office supplies 2008 842 4.4%
2010 AmazonMom 2009 1,129 4.6%
2011 Prime Instant Video, Subscribe & Save 2010 1,406 4.1%
2012 AmazonSupply (beta) 2011 862 1.8%
2013 AmazonFresh (Los Angeles launch) 2012 676 1.1%

40 Journal of Applied Corporate Finance • Volume 25 Number 3 Summer 2013

 The most common explanation for the sharp decline in new business we would start. Before we invest our shareholders’
operating margins focuses on Amazon’s low prices and gener- money in a new business, we must convince ourselves that the
ous shipping offers. That this analysis is misguided can be new opportunity can generate the returns on capital our investors
seen simply by examining the company’s gross margins—that expected when they invested in Amazon. And we must convince
is, revenues less cost of goods sold, which includes shipping ourselves that the new business can grow to a scale where it can
costs. If pricing and shipping were the main factors depress- be significant in the context of the overall company.
ing the operating margin from a high of 6.4% (in 2004) to
the recent low of 1.1%, then gross margins as a percentage It is important to understand the long-term nature of
of revenue would also have declined. But, in fact, Amazon’s Amazon’s investments. Successful physical retailers often
gross margins increased, from 23% of revenue to 25%, during enjoy relatively instant gratification from their expansion
this period. A similar trend holds true if we also subtract efforts. New stores commonly reach breakeven within 12 to
fulfillment costs. Gross profit less fulfillment was 14.2% of 18 months, and it is not uncommon for payback periods on
revenue both in 2004 and in 2012. The observed decline new store investments to be as brief as two years. By contrast,
in the operating margin, then, is primarily due to operating online success is generally slower in coming. Online retailers
expenses, a category that consists of marketing, technology & face substantial fixed technology costs, as well as the formi-
content, and general & administrative costs. dable challenge of gaining consumer trust and mindshare in
Why have operating expenses grown faster than revenue? the vast and impersonal world of the Internet. It is often years
The answer is not, of course, that Amazon suffers from before they begin to make money.
diseconomies of scale. In fact, because of various fixed costs We believe that, even among online retailers, Amazon
(relating to technology, fulfillment, and overhead), were takes a particularly long-term approach to category and
Amazon to have ceased geographic, category, and program geographic expansion, investing aggressively in customer
expansion after 2004, it likely would have enjoyed operating experience and price from the outset. The downside of this
margin expansion above its high water mark of 6.4%. Of approach is longer loss-making periods, while the rewards
course, in that case, subsequent revenue growth would have are customer goodwill and a higher probability of eventual
paled in comparison to its actual experience. success. Here is Bezos explaining his approach to this issue:
What did happen, as we know, is that Amazon embarked
on the ambitious initiatives outlined above by reinvesting cash If everything you do needs to work on a three-year time
flow from its developed businesses into new businesses. In fact, it horizon, then you’re competing against a lot of people. But if you’re
is clear from the shareholder letters that Amazon views itself willing to invest on a seven-year time horizon, you’re now compet-
as an advantaged platform for launching new businesses. This ing against a fraction of those people, because very few companies
perspective is evident as early as the 1999 shareholder letter: are willing to do that. Just by lengthening the time horizon, you
can engage in endeavors that you could never otherwise pursue. At
The [Link] platform is comprised of a brand, customers, Amazon we like things to work in five to seven years.2
technology, distribution capability, deep e-commerce expertise, and
a great team with a passion for innovation and a passion for serving A company concerned with the appearance of GAAP
customers well. We begin the year 2000 with 17 million customers, accounting metrics might have limited reinvestment to avoid
a worldwide reputation for customer focus, the best e-commerce or minimize operating margin contraction. By contrast,
software systems, and purpose-built distribution and customer Amazon deployed capital aggressively, while maintaining its
service infrastructure. We believe we have reached a “tipping focus on long-term value. The effectiveness of this capital
point,” where this platform allows us to launch new e-commerce allocation policy is reflected in Amazon’s remarkably high
businesses faster, with a higher quality of customer experience, a returns on invested capital, to which we now turn.
lower incremental cost, a higher chance of success, and a clearer
path to scale and profitability than perhaps any other company. Normalized Operating Margins and ROIC
First, let’s take up the imprecise exercise of estimating Amazon’s
The 2006 shareholder letter explains the patience normalized operating margins. By “normalized,” we mean profit
and capital discipline required to successfully pursue this measured after all expenditures necessary to maintain a particu-
“platform” strategy: lar level of revenue, but excluding expenditures that are expected
to contribute to future growth. Viewed in this way, normal-
Our established businesses are well-rooted young trees. They ized margins provide a picture of underlying profitability. The
are growing, enjoy high returns on capital, and operate in very economic reality, after all, is that the profits from Amazon’s
large market segments. These characteristics set a high bar for any developed businesses are funding the growth of its newer ones.

2. [Link]

Journal of Applied Corporate Finance • Volume 25 Number 3 Summer 2013 41

 Where do these growth expenditure’s appear on Amazon’s business (called “3P”) in which third-party merchants pay fees
income statement?. The most significant chunk is in an expense to sell through Amazon’s website. Because Amazon is not the
line called “technology and content,” or T&C. T&C is akin to merchant of record for 3P units, only the fees (as opposed to
research and development—development of new categories, the full product sales values) are booked into revenue. So, by
geographies, customer programs, devices, businesses (notably, grossing up 3P revenue to reflect product sales values, we can
AWS) and so on. During the 12 months ending June 30, 2013, compare the company’s revenues and margins with those of
Amazon’s T&C expenditures amounted to $5.5 billion—an physical retailers.
astounding sum for a retailer, reflecting in part the fact that all After adjusting its 3P revenue, we estimate Amazon’s
AWS expenses are booked into this line. gross revenue—representing the value of goods sold by
How much of this $5.5 billion is growth versus mainte- or through Amazon—to have been approximately $105
nance can’t be known for sure, but we can make an intelligent billion over the 12 months ending June 30, 2013.4 This
guess. Ebay, an innovative and rapidly growing competitor of in turn implies a 6% normalized operating margin ($6.1
Amazon’s, spent $1.7 billion in its analogous expense category billion / $105 billion), which is in line with the margins of
(“product development”) during the same 12-month period. Walmart and Target (of about 6% and 7%, respectively),
We believe this amount represents a conservative estimate of which we cited earlier.5 It is also worth noting that our
maintenance R&D for a comparably sized competitor, which estimate of normalized EBIT implies a 9% margin on
in turn implies growth spending in Amazon’s T&C line of Amazon’s reported revenue ($6.1 billion / $67 billion),
over $3.5 billion. which is consistent with commentary provided on the June
The growth expenditures in Amazon’s remaining expense 25th, 2013 second quarter earnings call, by Amazon’s CFO
lines (cost of goods sold, fulfillment, marketing, G&A) are Thomas Szkutak, in response to a question about the long-
clearly significant, but not easy to separate or quantify. They term margin outlook:
include, for example, marketing, overhead, and excess fulfill-
ment capacity in immature markets (i.e., China, Italy, and Our outlook hasn’t changed in that regard. Frequently, we
Spain), as well as long-term investments in customer experience, would be asked historically, are double-digit operating margins
such as Prime Instant Video, which likely burdens cost of goods possible? And I still think it’s possible. But, also, if it means—if a
sold by the better part of $1 billion.3 We think $2 billion is a good, high-single-digit operating margin gets us to better, higher
conservative estimate for the remaining growth expenditures, free cash flow over time, that’s fine, too.6
representing 3% of the related expense lines in aggregate.
From here, it is relatively straightforward to calculate
normalized return on invested capital (ROIC). We define
Reported EBIT (GAAP) 637 the numerator as net operating profit after tax (NOPAT).
Growth T&C (estimated) 3,500 Beginning with normalized EBIT of $6.1 billion calculated
Other growth expenditures (estimated) 2,000 above, and assuming an effective tax rate of 35% (the federal
Total growth expenditures (calculated) 5,500 statutory rate), we arrive at NOPAT of $4 billion. We define
Normalized EBIT (calculated) 6,137 the denominator, or invested capital, as net fixed assets plus
net working capital, less AWS net fixed assets. (Because AWS
As a sanity check, it seems worth comparing our estimate is excluded in the numerator, we exclude an estimated $1.7
of Amazon’s normalized operating margin to the margins of billion of AWS-related net fixed assets from the denomina-
its peers in the physical world. To do so, it is necessary to tor.7) The following shows our calculation of invested capital,
make an adjustment to Amazon’s reported revenue. Over using the company’s balance sheet as of June 30, 2013 ($
40% of Amazon’s unit sales are derived from its marketplace billions):

3. See [Link] 5. We have not subtracted the revenue associated with growth initiatives, because we
[Link] believe that this “growth revenue” comprises a relatively small proportion of overall gross
4. We estimate gross revenue by estimating gross merchandise value (GMV) for the revenue. Recall that AWS is excluded from gross revenue in the first place, and consider
3P business, adding it to reported “product sales” (for which Amazon is merchant of that revenue from China, Italy, Spain, and France in aggregate comprised about 5% of
record), and subtracting shipping revenue (which is included in the prior amounts). GMV Amazon’s reported revenue in 2012). Subtracting growth revenue would increase the
is estimated by first calculating the fees earned from marketplace sellers, which are ap- normalized operating margin as a percentage of gross revenue.
proximately equal to reported “services revenue” less reported “other revenue,” which for 6. Thomson Reuters Streetevents edited transcript of Amazon’s second quarter 2013
the period contemplated amounted to $8 billion. This sum is divided by our estimate of earnings conference call.
Amazon’s take rate (third-party fees as a percentage of GMV) of 15%, to arrive at a GMV 7. We estimate AWS net fixed assets by assuming that AWS comprises half of Ama-
of $53 billion. Adding this $53 billion to Amazon’s reported product sales of $56 billion zon’s “technology infrastructure” net fixed assets. Technology infrastructure net fixed as-
yields a total of $109 billion. From this we subtract shipping revenue of $3 billion, arriv- sets were reported until 2011, when they comprised over 40% of total net fixed assets.
ing at $105 billion of “gross revenue” (rounding down), which reflects the value of all This implies that in 2011, AWS-related assets comprised over 20% of total net fixed
goods sold by or through Amazon. Note that gross revenue excludes non-retail revenue, assets. To update the figures, we apply 20% to the most recent total net fixed assets
such as advertising and AWS. figure of $8.8 billion, yielding AWS net fixed assets of $1.7 billion.

42 Journal of Applied Corporate Finance • Volume 25 Number 3 Summer 2013

 Amazon’s ROIC of 70%, coupled with its proven willingness
Net working capital8 -5.9 and ability to take advantage of this ROIC. Provided ample
Property and equipment, net 8.8 reinvestment opportunity, Amazon should be able to grow
Goodwill 2.6 NOPAT at an extraordinary rate. For example, the company
Other assets 1.8 could double its $4 billion of NOPAT by investing roughly
Less: AWS invested capital -1.7 $6 billion at 70% ROIC ($4 billion / 70% = $6 billion). At
Invested capital 5.6 its current pace of investment, Amazon could accomplish this
doubling of underlying earnings power in less than three years.
When viewed in this light, Amazon’s multiple of 35X
Amazon’s ROIC, therefore, turns out to be an normalized NOPAT is consistent with its fundamentals,
eye-popping 70% ($4 billion / $5.6 billion). It should be assuming current ROIC and reinvestment rates are sustain-
emphasized, of course, that like all of the estimates we have able. To adequately analyze the extent of this sustainability
presented, this ROIC calculation is merely an approxima- would require delving into Amazon’s competitive advantages,
tion. Because Amazon represents a mix of businesses in market opportunities, and other subjects that are beyond the
significantly different stages of development, any analysis scope of this paper. We would add only that investors who
of underlying returns must be imprecise. Nonetheless, the are bullish on Amazon’s fundamental prospects as a business
crucial point can be made with confidence: Amazon’s under- should expect, and applaud, continued aggressive investment
lying ROIC is high. and correspondingly low GAAP margins.

Valuation
To see how ROIC drives Amazon’s valuation, consider the Josh Tarasoff is General Partner of Greenlea Lane Capital in New
following. For each $1 billion Amazon invests at a 70% York.
ROIC, $700 million of annual NOPAT is produced ($1 John McCormack is Associate Editor of the Journal of Applied Corpo-
billion x 70%). The value of this perpetuity is equal to the rate Finance.
annual cash flow divided by the cost of capital (WACC).
Assuming a WACC of 10%, we can estimate that the $700
million of annual NOPAT would be worth $7 billion ($700 The material presented herein does not represent a recommendation
million/10%). To simplify, we can posit a crude rule of to buy or sell any security. Likewise, the discussion is not designed to
thumb: the value created by each dollar added to a compa- be applicable to the specific circumstances of any particular reader,
and you should conduct your own research and consult with your
ny’s invested capital base can be estimated by multiplying by
own advisers before making any investment decisions based on
the ratio of ROIC to WACC. In Amazon’s case, $1 added the material presented herein. As of the publication date of this
to its capital base is thus estimated to create $7 ($1 * 70% material, Greenlea Lane Capital, through its affiliated entities
ROIC/10% WACC) of value. and client accounts, currently maintains a long position in shares
We are now in position to try and make sense of of [Link] Inc. (“Amazon”) and stands to benefit from an
Amazon’s valuation. The company sports a market cap of increase in the price of Amazon shares. Following the publication of
about $140 billion, in spite of reporting negative $100 million this article, the authors intend to continue transacting in Amazon
of GAAP net income over the 12 months through June 30, shares, and may be long, short, or neutral with respect to Amazon
2013. However, we now know that in Amazon’s case, GAAP shares and any related securities or derivatives. As such, no continu-
earnings is a meaningless metric for valuation purposes, ing statement is being made that the analysis contained herein is still
because it is depressed by high-ROIC, value-creating growth supported by the authors as of any date following the date of initial
publication. The authors have obtained the information contained
investments. And because higher levels of such investments
herein from sources believed to be accurate and reliable. However,
mean lower earnings, focusing solely on the low earnings such information is presented “as is,” without warranty of any kind,
figures gets the economic reality backward. whether express or implied. The authors make no representation,
A better way to frame Amazon’s valuation is to look at express or implied, as to the accuracy, timeliness, or completeness
the multiple of normalized NOPAT—35X ($140 billion/$4 of any such information. All expressions of opinion are subject to
billion). While this is far from a typical multiple (let alone change without notice, and the authors will not undertake to update
a bargain multiple) for a stock, this is accounted for by this material or any information contained herein.

8. Net working capital is defined as inventory plus accounts receivable plus deferred
tax assets less accounts payable less accrued expenses. Because of the efficiency of the
online retail model, Amazon generally receives funds from customers prior to paying
suppliers, resulting in negative working capital

Journal of Applied Corporate Finance • Volume 25 Number 3 Summer 2013 43

ADVISORY BOARD EDITORIAL

Yakov Amihud Robert Eccles Martin Leibowitz Charles Smithson Editor-in-Chief

New York University Harvard Business School Morgan Stanley Rutter Associates Donald H. Chew, Jr.

Mary Barth Carl Ferenbach Donald Lessard Joel M. Stern Associate Editor
Stanford University Berkshire Partners Massachusetts Institute of Stern Stewart & Co. John L. McCormack
Technology
Amar Bhidé Kenneth French G. Bennett Stewart Design and Production
Tufts University Dartmouth College Robert Merton EVA Dimensions Mary McBride
Massachusetts Institute of
Michael Bradley Stuart L. Gillan Technology René Stulz
Duke University University of Georgia The Ohio State University
Stewart Myers
Richard Brealey Richard Greco Massachusetts Institute of Alex Triantis
London Business School Filangieri Capital Partners Technology University of Maryland

Michael Brennan Trevor Harris Richard Ruback Laura D’Andrea Tyson

University of California, Columbia University Harvard Business School University of California,
Los Angeles Berkeley
Glenn Hubbard G. William Schwert
Robert Bruner Columbia University University of Rochester Ross Watts
University of Virginia Massachusetts Institute
Michael Jensen Alan Shapiro of Technology
Christopher Culp Harvard University University of Southern
University of Chicago California Jerold Zimmerman
Steven Kaplan University of Rochester
Howard Davies University of Chicago Clifford Smith, Jr.
Institut d’Études Politiques University of Rochester
de Paris David Larcker
Stanford University

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