Corporate Governance

Small is beautiful for BlackRock in China

16 Apr 2019

Foreigners can finally control mainland asset managers, but few are likely to sell given the $3.7 trln market’s promise. CICC could be an exception. Its fund arm is tiny, but it has licences that Larry Fink’s firm prizes. If BlackRock buys the outfit, similar deals should follow.

Founder’s exit gives Foxconn opportunity to reboot

15 Apr 2019

Terry Gou, chairman of the $39 bln iPhone assembler, says he plans to step down from day-to-day operations soon. The details are vague, and there is no obvious succession plan either. A well-managed handover, though, could bring new blood, and a long-delayed governance revamp.

U.S. CEOs put their heads in the clouds, literally

11 Apr 2019

Most of the 100 biggest U.S. companies let executives use company aircraft for personal trips. These perks tend to be a small part of executive pay but are red meat for social and financial activists. Some small firms are flagrant too. Yet there are some role models out there.

Holding: Investors ignore law of “stuff happens”

11 Apr 2019

Using fiascos like oil-well blowouts and tainted burritos to claim stock fraud is increasingly common in the United States, but misguided. Companies have a duty to disclose significant risks, not warn of unlikely mishaps. Arguing otherwise enriches lawyers at investors’ expense.

Korean Air CEO’s death sends grim chaebol message

8 Apr 2019

Cho Yang-ho has died at 70 just weeks after shareholders ousted him from the carrier’s board. The family-controlled holding company’s market value promptly soared by a fifth. Momentum for Korean corporate reform may be slowing, but this reaction suggests investors yearn for more.

Big Tech could use some schooling on ethics

5 Apr 2019

Google has scrapped an advisory council on artificial intelligence after protests about a few members. Yet it deserves credit for training staff on the dangers of unintended bias in algorithms. More outside input, particularly from academia, can help Silicon Valley reduce risk.

Letters to shareholders: a guide for the busy CEO

5 Apr 2019

Leaders like JPMorgan CEO Jamie Dimon are enthusiastic recent adopters of the form mastered by Berkshire Hathaway’s Warren Buffett. But penning sweeping views of what ails the world and the dangers of short-termism takes time. Breakingviews offers a template for corporate chiefs.

Elon Musk drives Tesla into the mire

4 Apr 2019

The electric-car maker’s CEO presided over big production and delivery drops last quarter, especially on its high-margin vehicles. Bigger losses for longer look likely. And the SEC now has more ammo over Musk’s tweets. His refusal to pump in more capital looks ever more dicey.

Australia can defy economic gravity for longer

22 Mar 2019

After nearly three decades of growth Down Under, there are fresh signs of sputtering. Fourth-quarter GDP grew just 0.2 pct, house prices are falling and wages only inching up. There are reasons for optimism, though. Canberra’s spending power, for one, can keep momentum going.

China’s majors fill up on gas at the right time

22 Mar 2019

PetroChina’s losses on gas imports swelled to nearly $4 bln in 2018, thanks to low domestic rates. Yet China’s oil giants are preparing to buy more LNG from U.S. firms. That aids the trade cause. More importantly, it may help lock in supply before a forecast shortfall.

Breakdown: Shanghai stock venue shows promise

18 Mar 2019

After multiple Chinese trading-experiment flops, a new board for fast-growing tech and biotech startups looks more auspicious. Its rules strike a balance between liberalisation and discipline. The approach could improve mainland markets at the expense of New York and Hong Kong.

Vale can keep pages from departing CEO’s playbook

4 Mar 2019

Fábio Schvartsman has stepped down weeks after a fatal dam collapse. Waiting for prosecutors to push the issue is bad form. Safety and governance will have to become bigger priorities for the $65 bln Brazilian miner, but many strategic and operational ideas are worth preserving.

Stricken Hanergy drops investors into black hole

1 Mar 2019

The solar company wants shareholders to swap frozen shares for stock in a vehicle which may or may not relist in China. Hanergy might well be ejected from the Hong Kong exchange before trading resumes, denying them an alternative. This raw deal would set a terrible precedent.

The Exchange: Fixing tech’s gender disparity

19 Feb 2019

Women hold too few roles in corporate America, especially in engineering and computer science. Verizon’s Genia Wilbourn joins Breakingviews to discuss how she and the telecom company are addressing that, from diversity training to influencing suppliers to the CEO’s crucial role.

Aussie watchdogs bark as economy starts to bite

18 Feb 2019

A spate of tough decisions on banks and other oligopolies augurs an era of stricter regulation. The broad inquiry into financial misdeeds helped spur an overdue crackdown. It's also a new risk for boards and investors as a long, stable growth streak Down Under looks vulnerable.

India’s tech rules are taking on a Chinese quality

11 Feb 2019

New Delhi's plan to compel the likes of Facebook and Google to police their content threatens free speech. Coming after edicts that limit foreign e-commerce giants, there is a touch of the People's Republic that will worry global players relying on the subcontinent for growth.

Vale’s Brazil dam damage will hurt its peers too

29 Jan 2019

A second disaster in three years has already cost the mining giant $19 bln in market value. Fines and a management overhaul will likely follow. Fresh scrutiny from stakeholders will hit an industry already grappling with high costs, slow projects and risk-averse shareholders.

Busy activists navigate tricky currents

22 Jan 2019

They are rattling the cages of new targets like Pernod Ricard and Campbell Soup. But regular investors are more demanding, and private equity may muscle in, panellists told Breakingviews Predictions events this month. The test is whether active shareholders produce better returns.

Hadas: Governance gold would help the Olympics

17 Jan 2019

A new probe into how Tokyo won the 2020 summer games feels sadly familiar. Persistent wrongdoing at executive and athletic levels arises from a toxic mix of money, symbolism and hypocrisy. That can’t be changed, but the Olympic “faster, higher, stronger” motto offers guidance.

JAB departure is sign to halt deal binge

15 Jan 2019

Chairman Bart Becht unexpectedly retired from the Krispy Kreme owner after swallowing several chunky acquisitions. Rising debt and the declining value of investments like Coty raise questions about JAB’s model. The remaining partners need a break before returning to the table.