Corporate Governance

Walt Disney takes mouse-sized governance step

21 Oct 2024

The $175 bln Magic Kingdom named ex-Morgan Stanley CEO James Gorman as its next board chair. Finding boss Bob Iger’s successor has been a disaster, but at least the man in charge of the job has shown himself capable of doing it. Minimizing the drama, though, will be tough.

23andMe deal should never be cloned

20 Sep 2024

The genetic-test firm’s entire board, save founder Anne Wojcicki, resigned in frustration with her stalled takeover bid. The offer is perhaps the least-worst detail. The once $6 bln company should never have gone public and super-voting stock primed it for a governance implosion.

Boeing pays belated price for shareholder primacy

13 Sep 2024

Some 33,000 workers voted to strike, adding to the $100 bln jet-maker’s woes. Union wages have been flat over 50 years as benefits shrank, while the CEO earned 600% more and investors pocketed lavish buybacks and dividends. Labor is understandably squeezing now-weakened capital.

China brokerage deal has more bark than bite

9 Sep 2024

The merger of Guotai Junan and embattled rival Haitong will create the country’s largest brokerage with assets of $225 bln. The overcrowded sector needs consolidation, but this deal probably won’t aid Beijing’s goal to foster a squad of world-beating investment banks.

Drahi-for-Bharti swap gives BT partial relief

12 Aug 2024

French mogul Patrick Drahi is offloading a 25% stake in the British telco worth about $4 bln to India’s Bharti. BT CEO Allison Kirkby can stop worrying about her indebted shareholder. Alongside Deutsche Telekom and Mexico’s Carlos Slim, her share register still looks crowded.

The Bank of Japan’s flipflopping can backfire

8 Aug 2024

Days after Governor Kazuo Ueda talked up interest rate hikes, his deputy is suddenly playing down the prospect. That may be intentional but it muddies the message to Japanese businesses on the outlook. It also overplays Japan’s role in sparking the global market ructions.

European boards have too little skin in the game

17 Jul 2024

Non-executive directors at big US companies get 60% of their pay in equity. That’s rare in Britain, France and Germany, where many board members own a slither of stock. Cash fees warp incentives, discourage engagement, and risk making Europe’s capital markets less competitive.

Microsoft opens windows onto AI antitrust paradox

10 Jul 2024

The software behemoth is ceding its non-voting board seat at OpenAI, the ChatGPT maker essential to its artificial intelligence plans. Building a silicon mind may take $1 trln, however, making deep pockets as powerful as governance rights. A bigger, messier crackdown looms.

Boeing’s future CEO has same mess, different day

8 Jul 2024

The $113 bln jet maker will plead guilty to criminal charges and pay a fine related to fatal crashes. Extra cash pledged for safety might not dent the entrenched duopolist’s earnings. Problem is, without forced improvements, the controversy awaiting Boeing’s next boss continues.

Boeing is just too big to jail

24 Jun 2024

The US government may pursue criminal charges against the $105 bln planemaker for lapses related to two fatal crashes. But Boeing’s importance as an exporter and defense contractor takes stiff penalties off the table. It’s the unhappy cost of nurturing national champions.

Musk expects more from shareholders than himself

12 Jun 2024

A vote on the Tesla boss’s court-nixed $56 bln payday has become a hostage negotiation, the implicit threat Musk could walk justified by saying 'a deal is a deal.' That didn’t stop Musk trying to kill a deal for Twitter. After recent dismal displays, investors should do likewise.

Spain’s $24 bln investment giant has too many hats

12 Jun 2024

Criteria Caixa takes dividends from its big equity portfolio and sends cash to the country’s top charitable foundation. Increasingly, though, Chair Isidro Fainé is fixated on protecting national champions like Telefónica. Pleasing Madrid means sacrificing returns for the charity.

Autonomy’s legal endgame leaves few real winners

7 Jun 2024

A US court has cleared Mike Lynch of fraud connected to a $12 bln sale of the group he founded to Hewlett-Packard in 2011. It only heightens the sense that HP’s due diligence was lamentable. But the snail-pace of justice also cost Lynch over a decade of his career.

Warren Buffett’s legacy is at stake via Bill Gates

17 May 2024

The Omaha sage pledged much of his Berkshire stock to the Gates Foundation. He did so when both the Microsoft co-founder and his ex-wife Melinda ran the charity. Now, her departure could put Buffett’s gift, equal to a 10% stake, in Bill’s hands. It’s a new sort of key man risk.

Memo to McKinsey: Avoiding Arthur Andersen’s fate

14 May 2024

After coughing up $1 bln for opioid-related settlements, the elite consultant may face criminal charges, too. There are notable differences from when a 2002 US indictment killed the auditing giant. But the looming existential threat increases the likelihood of costly concessions.

Sparring shareholders cause governance train wreck

13 May 2024

Norfolk Southern CEO Alan Shaw narrowly won re-election, but the chair didn’t, and three of seven dissident nominees got board seats. The outcome augurs ongoing clashes at the $50 bln US railway operator. It’s a pitfall of the split tickets enabled by universal proxy cards.

China property fix aims to restock speculation

6 May 2024

Reducing unsold inventory is Beijing’s latest directive and replaces the mantra “houses are for living in, not for speculation”. It’s a prelude to removing some investment curbs. Allowing people to get rich off the sector is a necessary evil to restore overall confidence.

Japan is the new Disneyland of global activism

7 Feb 2024

Elliott wants $24 bln property giant Mitsui Fudosan to offload its stake in the Tokyo theme park operator and buy back shares. Like many of his peers, Mitsui's CEO is a convert to shareholder religion. The new challenge for activists is getting company bosses to be more devout.

Dismantling Evergrande exposes Hong Kong-China gap

29 Jan 2024

A court in the financial hub has ordered the world’s most indebted developer to liquidate after talks with offshore creditors collapsed. Yet how this will be enforced on the mainland, where most of Evergrande’s assets are, is unclear. The experience of HNA may offer some clues.

Fractured world is changing investment geography

23 Jan 2024

Washington and Beijing’s quasi-Cold War, and rising protectionism, are already hurting foreign direct investment. Though some states are gaining from China’s falling FDI, overall cross-border flows are down. If Trump becomes US president, they will take another hit.