Corporate Governance

UK pension watchdog needs new tools, and backbone

24 Jan 2018

Prime minister Theresa May vowed to punish groups that fail to protect retirement benefits, like collapsed outsourcer Carillion. New tools could include fining companies or curbing payouts. But the regulator can do more with the powers it already has to make companies fill gaps.

Carillion collapse exposes new bank folly

22 Jan 2018

The failed UK contractor used lenders to finance 412 mln pounds of payments to suppliers when cash was running low. The process, known as “reverse factoring”, seems a lucrative way for banks to provide short-term credit. But insolvency exposes the true extent of the risks.

Activist makes crypto-demands of bitcoin miner

19 Jan 2018

Hedge fund Oasis wants reform at GMO Internet, a Japanese firm that looks a bit like a small SoftBank. The prospects of an across-the-board victory at a shareholder vote look as unreal as the tokens GMO mines. Yet this could still prompt a juicy revaluation of the $2 bln target.

Guest view: Market rocket fuel will run out

18 Jan 2018

Investors are pushing up U.S. equities with little regard for an array of warning signals, writes former Citibank executive William Rhodes. The Federal Reserve is running out of time to warn them about their “irrational exuberance” before a probable market correction this year.

Mizuho’s CEO choice may be lost in translation

16 Jan 2018

The Tokyo bank's next boss comes from the securities division. That's less telling than, say, if Deutsche Bank puts a credit trader in charge. Japanese executives tend to move around more. Given Mizuho's challenges, though, Tatsufumi Sakai's expertise should prove helpful.

Myanmar tourism stock soars away from crisis

8 Jan 2018

Hot-air balloon operator Memories Group had a strong debut after reversing onto the Singapore exchange. The shares jumped 60 pct amid an ongoing Myanmar military campaign condemned by the UN as ethnic cleansing. Investor optimism is hard to square with the political realities.

Viewsroom: Investors target sexual misconduct

29 Dec 2017

Companies that sweep settlements for bad behavior under the carpet will feel shareholder ire in 2018, Breakingviews predicts. Plus, Apple will float past the EU’s roving eye, splintering political parties are a ticking U.S. time bomb and bank bosses may hang up their hats.

Pushy investors on board for 2018 Pacific cruise

22 Dec 2017

Campaigns at BHP and Myer could set the stage for a pick-up in Australian shareholder activism. Sydney offers enticing targets, shareholder-friendly rules and potentially supportive institutional owners. Expect to see more governance skirmishes Down Under in the coming year.

Oil shareholders try capping sorry governance well

21 Dec 2017

SandRidge adopted a poison pill to fend off investors unhappy with a recent deal. Hess faces another fight with Elliott. Exxon is only now allowing owners to talk to the board. The shareholder pushback is welcome, but the industry’s slow response leaves it exposed to other risks.

Sun will be setting on Silicon Valley imperialism

21 Dec 2017

Expect tech firms to keep going public with lopsided share-class structures like Snap's that treat public investors as serfs. Rising pressure from fund managers and index creators, however, will bear fruit in 2018, mainly by imposing temporal limits to super-voting tendencies.

India bids adieu to “promoter” capitalism in 2018

21 Dec 2017

The country's errant tycoons have fewer places to hide as Prime Minister Modi ushers in a new era of governance, starting with a strict insolvency code. This will send serial defaulters packing and signal a shift towards more market, creditor and shareholder-friendly forces.

Steinhoff meltdown has silver lining for hedgies

20 Dec 2017

The S. African retailer’s bonds collapsed amid an accounting mess. But investors are not suffering equally. Steinhoff's fondness for convertibles means more of them are now being sold, pushing them to lower prices than potentially riskier paper. Nimble traders can take advantage.

Bitcoin finds unlikely ally in Asian watchdogs

20 Dec 2017

Japan and South Korea make up half of global trading volumes in the $300 bln bitcoin market. Tokyo has officially recognised digital currency exchanges. Seoul is mulling the same. Regulations help contain risk but also increase acceptance and allure of this untouchable cash.

Privatisation is no longer a dirty word in India

19 Dec 2017

The state has been stealthily reducing its role in industry by allowing private players to gain market share. There's appetite for a more aggressive approach. If national carrier Air India can be sold, look for banks, energy and other assets to follow if Modi wins a second term. This is a Breakingviews prediction for 2018. To see more of our predictions, click here.

A deluge of scandals in Japan will drive change

19 Dec 2017

Embarrassing lapses in governance and, perhaps even more painfully, in quality control have dented the country's reputation. The revelations are likely to continue in 2018. Company bosses will need to show that they understand what is really going on inside their organisations.

Dual-class Hong Kong will double-cross Wall Street

15 Dec 2017

To compete with New York for tech IPOs, the Asian financial centre's exchange is set to host companies with super-voting stock. Investment bankers will be degraded as much as investors. They stand to be paid less for the same deals and can expect to share fees more widely.

U.S. hands HSBC CEO perfect going-away gift

11 Dec 2017

The end of a five-year agreement over money-laundering lapses removes the threat of authorities yanking the bank’s U.S. licence. HSBC devoted 8 pct of its operating expenses to compliance last year. Though those costs will stay, departing boss Stuart Gulliver can leave on a high.

Broadcom fires board broadside from shaky platform

4 Dec 2017

The chipmaker is nominating 11 directors at Qualcomm, which has rejected its roughly $105 bln unsolicited offer. Only a brave shareholder would replace a board solely to advance a not-yet-financed bid. But the move pressures Qualcomm to engage before its annual meeting in March.

Rio Tinto plays it safe with compromise chairman

4 Dec 2017

After a nine-month search, the $90 bln miner picked director Simon Thompson over former Xstrata boss Mick Davis to lead the board. His mining, emerging-market and buyout knowhow should prove useful. A fresh push to squeeze out cash is another sign Rio is keeping risks calculated.

Jeremy Corbyn pay row shows costs of bank excess

1 Dec 2017

The UK opposition leader attacked “speculators” and criticised banker pay, as UBS chief Sergio Ermotti defended it. A decade after the crisis, remuneration still fuels dissent. Shareholders' failure to rein it in has led to dismal returns. Volatile politics could be more damaging.