CorpGov Bites

Opinion: Business to Blame for Anti-Business Mood, Marty Robins, Special to AOL News, 7/8/10. Where management was utterly disengaged from the business at hand, is it any wonder the public, and lawmakers, are demanding more regulation of the economy… resistance to good-faith efforts to improve governance by bolstering management oversight doesn’t endear business to society. Marty Robins also writes an occasional guest post to

Could your company outperform its competitors by 85% in sales growth and 25% gross margin? A group of Gallup clients achieved this competitive advantage by applying our behavioral economic principles. (Applied Behavioral Economics: The Next Discipline)

The idea that the human mind is based on an internalised statistical decision making algorithm is one we’ve met before. It’s a research fallacy which each successive generation of academics falls into by firstly using their latest research tools – statistical analysis packages, digital computers, etc – as metaphors for the way the mind works and then assuming that this is the way the mind actually works. There is a huge behavioural bias behind behavioural finance but it’s not the experimental participants who are subject to it, but the experimenters. (Behavioural Finance’s Smoking Gun)

Filing Deadlines and Proxy Solicitors – Checklist from The Activist Investor.

“We have recommended that internal audit should be outsourced rather than in-house because internal audit in-house is always dependent on the management of the company. Internal audit from outside will always be better, and then it should be given to chartered accountants,” ICAI President Amarjit Chopra told India’s the Economic Times (ICAI for compulsory outsourcing of internal audit functions, 7/8/10).

Not much new in the following but certainly glance-worthy:

  • Proxy Access Defense #1, Truth on the Market
  • Investors: be careful what you wish for, FT, 7/5/10. Can any of the players really afford the time or resources required to make engagement a reality?
  • The Future of the Board of Directors, Martin Lipton, Harvard blog, 7/6/10. We should recognize that the purpose of corporate governance must be to encourage management and directors to develop policies and procedures that enable them to best perform their duties (and meet our expectations), while not putting them in a straight jacket that dampens risk-taking and discourages investing for long-term growth and true value creation. ( Short-term shareowners are handing out the straight jackets.)
  • Proxy Access: A Sheep or Wolf in Sheep’s Clothing? I sometimes feel the same way about some Stanford University research as some of them seem to think about proxy access, a wolf in sheep’s clothing, although this latest bit doesn’t seem to say much.

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