Practitioner and Academic Submissions Accepted Until Sept. 15, 2015 Continue Reading →
Tag Archives | competition
After posting Cisco Systems: Prime Target For Proxy Advisor Competition, Cisco Systems: Proxy Proposal #5 – 11 Q&A, and Cisco Systems (CSCO): How I Voted – Proxy Score 56 I am still getting the most basic question from funds trying to determine how to vote. That’s understandable. People lack the time necessary to analyze proxy issues. That’s one of the reasons behind the proposal. More resources and more competition could make for better voting at Cisco for all shareowners.
I keep getting the same fundamental question. How would it work in practice? Here’s what I tell them. Continue Reading →
I received a series of questions about my 11/5/2013 post Cisco Systems: Prime Target For Proxy Advisor Contest. Since other $CSCO shareowners might have similar questions, I am posting the questions and our responses below regarding proxy proposal #5, APPROVAL TO HAVE CISCO HOLD A COMPETITION FOR GIVING PUBLIC ADVICE ON THE VOTING ITEMS IN THE PROXY FILING FOR CISCO’S 2014 ANNUAL SHAREOWNERS MEETING.
Question 1. I understand that your goal here is to increase retail investor participation – a goal we share. I certainly agree that individual investors are at a significant disadvantage without professional advice on their proxy voting.
Response: That’s not the main goal, but it would be an additional benefit. The main goal is to solve the shareowners’ “free-rider” problem, which hurts institutional investors too. For most investors it is not worth paying for good voting advice, unless you own more than 5% of the shares. (The Agency Costs of Agency Capitalism: Activist Investors and the Revaluation of Governance Rights, Ronald J. Gilson and Jeffrey N. Gordon, January 1, 2013) Continue Reading →
Cisco Systems (CSCO) faces challenges as never before. For example, see Here’s What Happened When Cisco Lost A $1 Billion Deal With Amazon. Meeting those challenges will take a concerted effort by management and the board of directors. Shareowners, who elect the board and vote on major proxy issues facing our company, also play an important role in Cisco staying competitive and profitable. Yet, most shareowners are passive. Most of us don’t even bother to vote our proxies and who can blame us? This year’s Proxy materials are over 80 pages long. Who has time to read, digest and make decisions on all that information? Finally, we could have the help we need with a proxy advisor contest paid by all shareowners (through Cisco) and chosen by a vote of shareowners.
Proxy Advisors and Research Providers Continue Reading →
In a recent Stanford “Closer Look” publication (How ISS Dictates Equity Plan Design), Ian D. Gow (Harvard but graduated from Stanford), David F. Larcker, Allan l. Mccall, and Brian Tayan argue ISS dictates pay equity plans. ‘Nonsense,’ was my first reaction. ISS policies generally reflect the will of its customers. The authors have a point but they miss the main problem. Their arguments begin in familiar territory. Continue Reading →
Mainstream microeconomics has emphasized the search for perfectly competitive markets within a framework of equilibria in a quest to maximize economic efficiency. Tisdell argues that intense competition can reduce economic performance. He concentrates on market adjustments and the evolution of economic systems where the role of diversity, product niches, cooperation between firms and comparisons with intra-species competition and inter-species competition. That basic premise rings true to me, since our environment is in constant flux.
His analysis certainly appeals to my sensibilities as a student of the sociology of knowledge, since he reminds us that, unlike other species, humans can “take deliberate actions to prepare themselves for future predicted events, or in come cases they can alter the course of these events to yield outcomes which they prefer.” Evolution is no longer a “blind” process, but can be consciously influenced. Continue Reading →
Mark Latham came up with a brilliant idea in the late 1980s: Shareowners should use their corporation’s funds to pay for external evaluations of governance and performance of the board and management. Shareowners would vote to choose among competing organizations to provide this service.
It was a simple concept but SEC rules made subsequent proposals unnecessarily complex and excluded advice on director candidates, often among the most critical decisions on a proxy. Continue Reading →
My wife, Myra Young, submitted a proxy proposal to Costco aimed at establishing a new and innovative way for shareowners to obtain proxy voting advice. The proposal would set up a contest, pay for proxy advice out of entry fees and corporate funds, and would then share the advice of four winners with all Costco shareowners. Continue Reading →
The recent two day International Conference on Competition Law that concluded in New Delhi found that governments that work too close to big business protect old technology and prolong recession. In times of recession businesses plead for protective measures to cushion them from aggressive competition. Receding demand forces them to cut jobs and add to the burgeoning unemployed figures. Protectionist measures create entry barriers, starve new technology start ups and prevent job creation, thus setting in motion a vicious cycle that prolongs recession. Free and open competition helps radicals to lead the charge to creative destruction in which only the best survive.
The experts advocated development of a National Competition Policy to precede industrial policy providing clarity, cohesiveness and direction to the competition laws. It would help create a buy-in among various sectors and define roles and expectations of state and non-state actors, thus making enforcement of competition law easier and more effective. The experts that had come from all over the world, including chairmen of competition authorities, found Indian Competition Act 2002 a perfect ideal for inclusive growth, but rusting because of non-use. They were surprised that while the Indian Competition Act provided the toughest penalties for cartels, India has the lowest capture rate because of inadequately trained staff, lack of training in modern investigation techniques and lack of political will. The conference concluded
cartels are a conspiracy against the common man and its pernicious effect is visiting on rising food prices. There needs to be a national campaign against cartels. In regard to detection, today’s technology can be a great ally. Best way to catch is dawn raids not for discovering sacks of gold but grabbing all computer equipment. The hard disc will tell all. What is needed is the will to carry out search and seizure.
In his inaugural address Dr Veerappa Moily, the Law Minister of India called for vigorous application of competition laws. He advocated national legislation to extend the scope of the completion law to prevent anti-competitive conduct in professions, farmers, and rural cooperatives. He said the law should be used not just to promote free competition but also to protect small players and cottage industries to bring about a truly level playing field.
In his keynote address Mr Salman Khurshid, Minister for Corporate Affairs, asserted that the competition policy and law should aim to provide socio economic justice. It should harmonise the twin objectives of protection and free enterprise. Competition policy should promote good corporate governance and bring about boardroom reform.
India’s growth narrative is linked to the dreams and hopes of its youth. With average age of an Indian under 26 years, India is one of world’s most aspirational economies. This has potentially catastrophic consequences . If Indian youth does not find jobs, it becomes an easy target for terror groups. Terror from within is far more lethal than terror from outside. By protecting intellectual property, regulating mergers, curbing cartels and abuse of dominance widens the economic base and unleashes corporate energy triggering an explosion of innovations that enables new technology radicals to overthrow incumbents and drive inclusive growth. History of modern industrialization has revealed that no real innovation has come from dominant industry. It has always been from the outside. The upstarts and radicals have succeeded after protracted battles. He said closeness of the businesses with government militates against innovation and inclusive growth. What we need is fast, fearless and furious enforcement for fair and open competition regime with proactive participation from executive, legislative and judiciary.
Earlier Justice Pasayat, chairman competition appellate tribunal said “An overriding aim of competition law is to promote economic justice. Justice is the only weapon that can secure stability to society and provide sustainability to business. As Pope Paul VI said “If you want peace, work for justice.” Competition law is essentially an instrument that helps us achieve that elusive goal.”
The valedictory address was delivered by Justice Altamash Kabir of Supreme Court of India. He said competition law in India is a public policy challenge and not just a legal argument. It needed understanding of both law and the socio-economic context. “We need to use competition law to remove entry barriers to allow innovators and free enterprise to succeed and redeem the aspirations and dreams of our youth.”
The Conference was organized jointly by the International Academy of Law and the UK based World Council for Corporate Governance in association with the Law Society of UK and the Competition Appellate Tribunal of India. Eminent speakers included several cabinet ministers such as Dr M Veerappa Moily, Minister of Law & Justice, Shri Salman Khurshid, Minister for Corporate Affairs, Prof K V Thomas, Minister for Consumer Affairs , other luminaries such as Mr Arun Maira Member Planning Commission, Justice Altamas Kabir, Judge Supreme Court of India, Mr. Fali S. Nariman, an international authority on jurisprudence and Justice Pasayat Competition Appellate Tribunal of India who was also the chairman of the steering committee. Overseas experts and law firms included Sir Christopher Bellamy of Linklaters, Chairman of UK’s Competition Appeal Tribunal and judge EU General Court, William Blumenthal of Clifford Chance and a former General Counsel, Fair Trade Commission of USA and several Chairmen of Competition authorities worldwide.
The publisher of CorpGov.net will be in Kolkata, India in mid to late December and may have some availability for meetings. Contact James McRitchie.