Corporate Governance

Tesco wrong target for UK exec pay revolt

1 Jul 2010

Some investors are taking a shot at the successful UK retailer's executive pay. This follows vain attacks on pay at other winning companies. Healthy beasts may look better when stuffed, but successful predators go after the weak. Protests should aim clearly at pay for failure.

BP’s Hayward is CEO in name only

21 Jun 2010

The boss of the UK oil major has lost the authority to lead BP when the Gulf disaster is over. The fact that he's handed over a lot of the cleanup effort shows the board realises this. But that's no excuse for a sailing jaunt. Hayward must still conduct himself like a CEO.

Lehman will struggle to make Barclays’ case stick

21 Jun 2010

When Barclays bought Lehman's carcass in 2008, it was feted. Now it is accused of cheating creditors out of $11 bln and its top brass including John Varley and Bob Diamond are in court. While Barclays may have sailed close to the wind, it will probably get away with it.

BP teaches governance lesson: don’t trust formulas

18 Jun 2010

The crippled oil giant once had a chairman and a CEO perceived to be strong. Now it has two relative weaklings. Both combinations helped spawn a gigantic corporate disaster. The British governance model is flawed, but so are others. No system can work always and everywhere.

Tony Blair for BP chair

16 Jun 2010

If the company's future in America is to be assured, both its nearinvisible chairman and its illstarred chief exec will have to go. There's a good internal candidate for CEO, but picking the next chairman requires some lateral thinking. One man ticks all the boxes.

Debt crisis helps smother plans for bank levies

4 Jun 2010

A big lender tax looked like a tempting idea just after the first banking crisis. But bad debts are a rising challenge in the current sovereign mess, and governments are cooling on bankbashing. Anyway they can't agree on how it would work. The G20 will likely shelve the idea.

JPMorgan’s good name blemished by record UK fine

3 Jun 2010

The esteemed Wall Street firm has got a $49 mln penalty for mingling up to $23 bln of client funds with its own over seven years. But JPM probably isn't alone in committing the breach. The regulator, which is almost as culpable, wants to be seen to be making an example of it.

BP belatedly starts to admit its weaknesses

3 Jun 2010

When oil started to spew into the Gulf of Mexico, the UK oil group was confident, even arrogant, about the drilling arrangements and its ability to cope with the blowout. Boss Tony Hayward is now sounding humbler. The company may finally have stopped believing its own hype.

UK governance code fails at BP and Prudential

3 Jun 2010

Two highly respected companies have suffered catastrophic failures. Both are fully compliant with best practice on corporate governance. A fat lot of good it did them. Unfortunately, chairmen and chief executives who are men for all seasons don't yet exist.

BP spill could soon put CEO’s job on the line

13 May 2010

Boss Tony Hayward wants to focus minds on the UK oil major's response to the Gulf of Mexico spill. But U.S. hearings raised tough questions for BP about the initial rig explosion. Hayward has given himself 90 days to stop the leak. But his job gets less safe as the saga drags on.

Goldman could use independent chairman right now

4 May 2010

The lost opportunity in not separating the chairman and CEO roles when Lloyd Blankfein took over in 2006 is now becoming apparent. As rivals like Citi have shown, a nonexecutive chairman helps provide air cover for the CEO it's not too late for Goldman.

Essar Energy IPO raises governance issues

22 Apr 2010

The current board will be dominated by the Ruia family which will also retain a 75 pct stake. It's great that Essar Energy plans to appoint another independent director but unfortunate that this won't happen before the London listing.

Shareholders can’t do board’s work on bank bonuses

25 Mar 2010

The UK government wants to give shareholders a bigger say on bankers' pay. It's sensible to let investors vote on compensation beforehand. But there are limits to what shareholders of public companies can be asked to do. Detailed scrutiny has to be the board's responsibility.

Rio trial should give China investors pause

23 Mar 2010

Four employees of the miner have admitted taking bribes. Their treatment may seem harsh, and has a political flavour. But China has never claimed to follow the Western rule of law. Rapid economic growth may have blinded investors and companies to the risks that entails.

Lloyds still has some explaining to do

23 Mar 2010

The head of the UK bank's remuneration committee is right to step down after the furore over chief executive Eric Daniels' bonus. Lloyds' chair Win Bischoff now needs to battle to restore his board's credibility. Full disclosure in its annual report would be a good start.

Geronzi not the right man for Generali

19 Mar 2010

The Italian chairman of Mediobanca is the favourite to become chairman of Europe's thirdlargest insurer. But Geronzi's controversial past should rule him out of contention. While Generali needs a firmer hand at the helm, it would benefit from a more outwardlooking candidate.

Nomura changes pave way for a rising Lehmanite

17 Mar 2010

The architect of the Japanese bank's Lehman acquisition is retiring from his role running Europe. But Sadeq Sayeed's exit shouldn't be cause for panic. This transformed firm needs a new type of management from here. A former Lehman banker could be best placed to succeed Sayeed.

UniCredit faces long slog back to health

17 Mar 2010

The market has cheered the Italian bank's betterthanexpected earnings. UniCredit has cut costs, boosted capital and shrunk its balance sheet. But low interest rates and high bad debt charges will dampen UniCredit's recovery, much of which is already priced into the shares.

UniCredit’s Profumo survives to fight another day

16 Mar 2010

The Italian bank's CEO has seen off investors angry about his restructuring of its domestic business. The board will probably back him at a key April meeting, for fear of destabilising the shares. But he will face another fight if he doesn't lift UniCredit's performance soon.

Report escalates Lehman ineptitude to new level

11 Mar 2010

A damning court exam of the firm's collapse makes CEO Dick Fuld and his lieutenants appear even more out of touch than first appeared. Balance sheet shenanigans may land them and auditor Ernst & Young in court. The exposé is also the best guide yet to prevent future failures.