Corporate Governance

Gnutti resignation won’t be enough

11 Jan 2006

The disgraced Italian financier's coinvestors should try to remove him from Hopa s capital structure. That s the best chance of preserving value at Hopa, conceivably even avoiding a E1.1bn capital loss from its stake in Telecom Italia.

Sovereign denies last right to shareholders

5 Jan 2006

The US bank's decision to delay its AGM until it sells a near 20% stake to Santander strips investors of their last way to vote on the deal. It s the latest in a string of decisions taken by chief executive Jay Sidhu to defy his shareholders.

Crosby’s exit from HBOS is praiseworthy

5 Jan 2006

The resignation of the UK bank s boss is good for everyone. After all, Crosby has always been more of a fund manager than a banker. By leaving early, he has prevented his worthy successor retail banking maestro Andy Hornby becoming CEO elsewhere.

Betfair struggles to overcome management jinx

5 Jan 2006

The online betting exchange may have revolutionised UK gambling, but it has a poor record at recruiting and retaining executive talent. That s because it tried to float too soon. Unless the latest management changes prove more successful, the best option may be a sale.

Coke makes half-hearted gesture on severance pay

23 Dec 2005

The softdrinks maker kept quiet about its decision to allow shareholders a vote on big payoffs for departing executives. Why? Maybe it was ashamed of bowing to the famed Teamsters union. More embarassingly, it would still be rewarding executives for failure.

Career Education offers lesson in governance

22 Dec 2005

Management of the US operator of private colleges remains in charge despite an overwhelming vote of noconfidence back in May. The situation highlights a big problem with US governance: even when investors issue managers a failing grade, they can t expel them.

Qwest’s Nacchio knew too much to sell

21 Dec 2005

Unlike Worldcom's Bernie Ebbers, exQwest CEO Joseph Nacchio refused to go down with the ship, bailing out of the US telecoms company. Now he faces 42 counts of insider trading. True, Qwest's targets were a stretch. But weren't everybody's during the boom?

Ackermann caught in Mannesmann nightmare

21 Dec 2005

He had been expected to tough a retrial out; but with Deutsche's chairman openly speculating about his successor, that looks less certain. The Deutsche Bank chief faces a retrial over the controversial bonus case which will prompt more negative publicity in Germany.

HealthSouth turncoat had it coming

12 Dec 2005

The 5year sentence for the former HealthSouth finance officer who testified against acquitted boss Scrushy may look harsh. But it's wrong to conclude he s paying for Scrushy. There s a lesson here for cooperating witnesses in future fraud trials.

Scrooge is running Corporate America

9 Dec 2005

While US businesses cut back on workers perks, their chief executives get richer and richer. The resulting growth in inequality is both a consequence of globalisation and its greatest threat.

GM tries to bring Kerkorian on board

8 Dec 2005

The presence of Kirk Kerkorian s representative on GM s board could add a much needed jolt to the car company as it addresses its problems. But with his GM stake about $450m under water, Kerkorian is unlikely to be an advocate for bankruptcy. That suits GM boss Rick Wagoner.

Investment bankers don’t gobble up all the profits

2 Dec 2005

It s a widely held belief that employees of investment banks pay themselves generously, leaving few scraps for their shareholders. But based on accrued compensation this year, that s not the case for Wall Street s leaders Goldman and Lehman. It s only true for laggards.

HSBC earns benefit of doubt over Green promotion

28 Nov 2005

The bank has flouted corporate governance best practice by promoting its chief executive to chairman. But it has given some clear reasons, and given them promptly. That should spare it the drubbing meted out to Barclays.

New broom at DrKW heralds shift for London

24 Nov 2005

The investment bank s incoming CEO Stefan Jentzsch has a key advantage over the departing Andrew Pisker. He is German. That makes DrKW better equipped to make money in its home market. But it may translate into a demotion for the London office.

Can creeping takeovers be a good thing?

18 Nov 2005

The gut reaction is never. But like all matters in the area of corporate governance, each case must be considered on its individual merits. On that basis, for example, a bid to control theme parks operator Six Flag is a good thing. Santander s bid for a chunk of Sovereign is not.

Hedge funds aren’t the only bullies

18 Nov 2005

Traditional longonly investors are also getting uppity, kicking companies into play and heaping pressure on errant chief executives. This is a good sign that they are taking their fiduciary obligations more seriously and learning from the hedge funds.

Morgan Stanley layoffs hit raw nerve

17 Nov 2005

John Mack s plan to whittle two dozen managing directors from the ranks has sent the investment bank into a tizzy. That a minor change in staff levels would provoke such a reaction is testament to the febrile environment still destabilising the place.

Cromme shouldn’t quit VW board

17 Nov 2005

One can understand why the architect of German corporate governance wants to bail out. VW's governance practices are extremely poor. But it would be better for shareholders if Cromme stayed on to fight a guerilla action against Piech, VW's chairman, from inside.

Piech pays back his union pals

15 Nov 2005

They saved the Volkswagen chairman s bacon when a key shareholder tried to oust him last month. Now Piech has let them choose the carmaker s new personnel director. No wonder some investors scent a strange smell in the air.

Compass needs a new chairman now

13 Nov 2005

Incoming chairman Sir Roy Gardner may not be freed from Centrica until next summer. Given the mess Compass is in, that s not good enough. Either Gardner should extricate himself now, or Compass should find itself another candidate.