Tag Archives | international

Review: International Corporate Governance

International Corporate Governance stands out as textbook that looks at the topic from a truly global standard. Author Marc Goergen first came to my attention in the 1990s as a member of the European Corporate Governance Network (ECGN), since renamed the European Corporate Governance Institute (ECGI). He brings both breadth and depth to a wide range of topics presented in lay terms. Continue Reading →

Continue Reading ·

Review: Corporate Governance and the Global Financial Crisis

Corporate Governance and the Global Financial Crisis: International Perspectives by William Sun, Jim Stewart, and David Pollard addresses the worldwide crisis that cost Americans an estimated average of $188,000 per household. We will be paying back that debt for decades… or perhaps more accurately, our children will be paying back that debt. Yes, we’ve passed the usual spate of laws after a financial crisis and regulations are still being written, but almost nobody I talk to, except perhaps those on Wall Street, thinks we have solved the issues. This book discusses some of the weaknesses, such as executive pay, risk management, board practices, regulation capture, the failure of shareowners to obtain and/or exercise rights, etc. Perhaps more importantly, many of the contributing scholars offer possible solutions. Continue Reading →

Continue Reading ·

Review: Shareholder Democracies?

Shareholder Democracies?: Corporate Governance in Britain and Ireland before 1850 addresses a central issue. Current governance structures often allow managers to pursue their own interests. According to some, a dissemblance of democracy has led to “elitism and self-interest in the boardroom,” resulting in Continue Reading →

Continue Reading ·

India's Cross Border Deals Point to Needed Reforms

To do more jumbo deals in a tougher world, Indian firms need to tackle a glaring area of weakness. This is their complex structures, which mean cash flows are spread thinly, and their dislike of issuing equity for fear of diluting their controlling shareholders. Both factors combined make it hard to marshal resources without resorting to risky levels of debt. India’s second-biggest group, Reliance Industries, scores well on the first count, and has the financial firepower to spend perhaps $15 billion safely. But few others do. On February 25th Vedanta, a London-listed natural-resource firm with assets mainly in India, launched an operation to merge its domestic units and clear up a sprawling empire. More firms need to do the same.

That’s the conclusion of Running with the bulls: Are Indian firms really going to take over the world?, The Economist, 3/3/2012. Although they’ve gotten a lot of press, India’s share of global cross-border deals by value has been relatively small, about the same as buyers from Brazil and Russia, well China. Moving away from holding chains with dominant shareonwers may hold a key to enabling more promising acquisitions.

Continue Reading ·

CII Contract with Equilar a Positive Step But More Needed to Address Pay Issue

Equilar, the leading provider of executive compensation benchmarking and research solutions, announced the release of its Pay-For-Performance Analytics suite yesterday, along with the fact that the Council of Institutional Investors (CII), whose members hold $3 trillion in assets, has signed on as the first client. According to the press release:

By combining an innovative market-based algorithm to identify peer companies with a realizable pay methodology using long Continue Reading →

Continue Reading ·

Review: Trust & Control in HRM

Trust and Human Resource Management, edited by Rosalind Searle and Denise Skinner highlight trust as key to human resource management (HRM) from pre-entry to post-employment. The collection will be of great value to academics in the HR field and to practitioners interested in enhancing trust levels in their organizations.

Trust has long been associated with organizational effectiveness, efficiency and performance that can more easily grow in a climate of high motivation, Continue Reading →

Continue Reading ·

FCPA Liability

Two recent developments bring the potential for individual criminal liability under the U.S. Foreign Corrupt Practices Act (“FCPA”) back into the spotlight. These developments underscore the extensive reach of the FCPA, which can extend criminal liability to U.S. and non-U.S. citizens alike and to circumstances where an individual does not have actual Continue Reading →

Continue Reading ·

HKEx: New Listing Rules

The Stock Exchange of Hong Kong Limited (“Exchange”) recently published its Consultation Conclusions on Review of the Corporate Governance Code (“Code”) and associated Listing Rules. The Code and Listing Rules amendments aim to promote the development of a higher level of corporate governance among listed issuers and bring Hong Kong in line with international best practices.  They will come into Continue Reading →

Continue Reading ·

Anonymous Analytics Examines Corporate Governance

Anonymous is “a decentralized network of individuals focused on promoting access to information, free speech, and transparency. The group has made international headlines by exposing The Church of Scientology, supporting anti-corruption movements in Zimbabwe and India, and providing secure platforms for Iranian citizens to criticize their government.”

Anonymous Analytics, a faction of Anonymous has moved the issue of transparency from the political level to the corporate level. To this end, we use our unique skill sets to expose companies that practice poor corporate governance and are involved in large-scale fraudulent activities.

Anonymous researchers–who include unnamed and unnumbered “analysts, forensic accountants, statisticians, computer experts, and lawyers”–will base their investigative reports on information “acquired through legal channels, fact-checked, and vetted thoroughly Continue Reading →

Continue Reading ·

Shareholder Democracy Summit Coming to Toronto: Blank Vote Issue

The Canadian Society of Corporate Secretaries announces the Shareholder Democracy Summit ─ a Canadian first. CSCS has invited key stakeholders to gather this coming fall on October 24 and 25 in Toronto for an important national summit on shareholder democracy.

CSCS President Lynn Beauregard announced today that invitations to register for the Shareholder Democracy Summit will be issued in the coming weeks to all key participants. The CSCS President remarked that when Canadian shareholders vote, whether they are individual shareholders or one of our largest institutional shareholders, their voice is often not heard or it is misheard. People think it’s like voting in an electoral campaign – once a shareholder fills out Continue Reading →

Continue Reading ·

Audio Friday: BBC Discussion on Corporate Governance

Peter Day asks what’s wrong with corporate governance. Business leaders make a lot of fuss about corporate governance, but the scandals keep on coming. In this programme, Peter Day hears from some leading authorities who makes several observations concerning nonexecutive directors, ownerless corporations, and the need for shareowners to sit on the nominations committees, a stewardship proposal for shareowners, and ratcheting CEO pay even when a company isn’t paying the cost of its capital. The program, entitled Bad Company, hit a number of topics quite squarely.  Well worth a listen.

Continue Reading ·

Deadline for Golden Peacock Awards: September 14

If you know of good candidates for the Golden Peacock Awards, instituted by Institute of Directors in 1992, now is the time to get nominations in, since they are due September 14, 2011. Below are the categories:

A.      Golden Peacock Global Awards

  1. Sustainability
  2. Excellence in Corporate Governance

B.       Golden Peacock National Awards

  1. Climate Security
  2. Sustainability
  3. Excellence in Corporate Governance
  4. Innovation Management

The application form cum guidelines can be obtained by sending an Continue Reading →

Continue Reading ·

Why Would Anyone Invest in China?

Francine McKenna writes that Deloitte Shanghai refuses to turn over workpapers and documents relevant to the SEC in their investigation of Longtop.

“Chinese law prohibits Deloitte China from providing the requested documents directly to a foreign regulator,” said spokesperson Lauren Mistretta. “Deloitte China is caught in the middle of conflicting demands by two government regulators, and DTTL hopes that this matter will be resolved in a timely and sensible matter.” McKenna concludes:

The S.E.C. must consider how much longer they will allow companies to list in the U.S. if they honestly and clearly tell you they are out of the reach of U.S. courts when something goes wrong.

The PCAOB must consider how much longer they will allow foreign-based audit firms to produce audit opinions if the PCAOB can not inspect them and if home countries refuse to cooperate with U.S. regulators.

U.S. courts must consider how seriously to take claims by global audit firms that they were “duped” by foreign fraudsters when they Continue Reading →

Continue Reading ·

Review: The Corporate Objective

Although large public companies dominate the world, there is no unanimity as to their objective. Andrew Keay tackles this very important topic with skill and in considerable depth. First, he examines the two most dominant theories, shareholder primacy and stakeholder theory. Unsurprisingly, he finds them falling short and goes on to propose the inelegant but well thought out “Entity Maximisation and Sustainability Model.”

Under his EMS model, directors are to endeavor to increase the overall long-term value of the corporation, while ensuring the corporation survives. While I find the objective rather uninspiring, Keay does an excellent job of building upon, if not Continue Reading →

Continue Reading ·

The Esoteric Investor: Alternative Investments for Global Macro Investors

This book has nothing to do with corporate governance. I spent a couple of hours reading hoping to find a few possible investments to help me keep CorpGov.net going. Unfortunately, I found very little.

The book only really reviews three areas: demographics, fish (focusing on tuna) and water. The demographics was somewhat interesting but not much new for me except for the discussion of various derivatives and reverse equity transactions. One interesting graph showed the relationship between peak spending in the US and the DJIA. By that measure, it looks like the market will start picking up again around 2018… so, there should be lots of buying opportunities between now and then.

The tuna section was much longer and less interesting. Yes, I agree. Fishing resources are diminishing quickly, consumption of seafood is way up, 90% of the big fish are gone and a third of the ocean is in collapse. I didn’t see much in the way of opportunities in that section for the Continue Reading →

Continue Reading ·

India Against Corruption

Employees replaced their jackets with white tees imprinted with “India Against Corruption” slogan. On 24 August 2011, Bangroleans formed a 17-kilometer human chain on outer ring road to protest against corruption. Finally, the middle class Indians have discarded their cloak of apathy. Passion, enthusiasm and commitment to change the system is replacing cynicism, skepticism and disillusionment.

Indian public supports Anna Hazare’s fight for a strong Lokpal Bill. The bill when implemented will hopefully reduce demand side of corruption. In the din, we are forgetting that demand and Continue Reading →

Continue Reading ·

India: Independence of Boards at Risk

Boards have become larger but controlling for other things, less independent (have fewer independent directors) after the crisis. Much of this seems to be the result of a “supply shock” in which independent directors have become more aware of the risks associated with board positions. In the three weeks of January 2009 after the Satyam fraud came to light, independent director exits soared to 109 from a monthly average of about 30 before the crisis. Over a longer horizon, independent director exits per year have risen by 20% in the post-Satyam period as compared to the three years before the crisis…

Executive director appointments have more than doubled in the post-Satyam period than before. Their proportion on boards has risen by 16%.  (The drop in the number of independent directors in boardrooms bodes ill for corporate governance, FT, 8/20/2011)

Indian Boards should consider expanding their horizons, seeking directors from a much more diverse pool of creative professionals from outside their normal circles, including experts in social media, women and international candidates.

Continue Reading ·

Review: Business Ethics and Corporate Sustainability

Business Ethics and Corporate Sustainability contains fourteen essays examining mainstream business models with the aim of designing more sustainable systems with regard to corporate responsibility issues, such as the environment and human rights, while reducing overall risk profiles and increasing legitimacy.

Christopher J. Cowton, for example, examines the moral status of corporations, their collective responsibility and systems of blame distribution. While it makes sense to blame a corporate entity as a first approximation, that should be only the first step in determining blameworthiness. Leaving blame as resting with BP for the Gulf oil spill, risks failing to identify and blame culpable individuals. Cowton moves us away from reified notions of corporate moral agency, to focus on methods of tracing responsibility in detail to specific individuals according to governance and responsibility frameworks. People are moral agents; corporations are not.  Johan Wempe advances this notion further, examining notions of role responsibility.

Kevin T. Jackson retraces Aristotelian notions of generosity as a moral virtue and ends with a promising direction in his discussion of venture philanthropy, which in some respects, harkens back to businesses during the Middle Ages. Wouldn’t it be great if entrepreneurs started measuring themselves not by how much money Continue Reading →

Continue Reading ·

Powered by WordPress. Designed by WooThemes