Corporate Governance

UK politicians should think before sidelining UKFI

22 Feb 2010

The entity that looks after the UK's bank stakes risks being marginalised after the election. But diluting its mandate would undermine UKFI's efforts to maximise value for taxpayers. Besides, the past year has shown politicians can benefit from keeping the banks at arm's length.

Fading crisis should galvanize bank boards

8 Feb 2010

Regulators haven't exactly covered themselves in glory. But an earlier defense against bank excesses ought to be their boards. It's no easy job, but directors could try harder to control risktaking. They shouldn't be shy about hammering away with uncomfortable questions.

Time to call time on Mitchells & Butlers board

25 Jan 2010

The board of Britain's biggest pub company made a fundamental error. Upsetting a 23 percent shareholder is asking for trouble, and when the holder of another 18 percent agrees with him, the end is nigh. The board will be thrown out on Thursday, and quite right too.

US bank tax should embrace policy not populism

11 Jan 2010

If the Obama administration indeed proposes a broad tax on the financial sector, it should serve a specific purpose, like making taxpayers whole from bailouts. A tax should be timely, targeted and temporary, or it risks becoming a permanent and punitive revenue grab by Uncle Sam.

Yahoo CEO report card – promising, but incomplete

8 Jan 2010

Carol Bartz shows promise. In her first year, she worked well with difficult classmates (despite occasional outbursts of profanity). Her Bminus selfassessment illustrates her discipline and work ethic. Carol s creative efforts, however, need improvement.

Bank reform grace period should be limited

16 Dec 2009

The Basel Committee is to allow banks to make a gradual shift towards compliance with new capital and liquidity rules. That is reasonable and necessary while the economic recovery is still a work in progress. But too long a delay in full adoption would be equally dangerous.

GM needs to explain why it’s replacing its driver

1 Dec 2009

Removing Fritz Henderson as CEO may be a good thing. He was part of the old guard who drove the company into bankruptcy. As Fiat and Ford have shown, new blood from outside the industry helps power a turnaround. But the lack of an explanation from GM sends a worrying signal.

Walker does what he can for UK bank governance

26 Nov 2009

The former civil servant and current Morgan Stanley advisor has done what the government asked him to: provide solid ideas for improving bank boards. There are no radical plans for waking up dozy UK shareholders. But then again, that once mighty group hardly matters any more.

What’s on boom-time Wall Street bosses’ minds?

23 Nov 2009

Sure, pay is right up there. And the ability to sell their stock holdings might fuel excessive risktaking, as a Harvard study suggests. But investment banking bosses are also driven by power, prestige and, in bubbles, a belief that they know best. That is hard to guard against.

Norman brings ITV debacle towards respectable end

18 Nov 2009

The turnaround maestro has been named chairman of the troubled UK broadcaster. The choice is a surprise, but a happy one. Norman faces a tough job, but investors should take comfort from his record at Asda and Energis and his ties to the Conservative party.

Ousted GMAC boss should consider silver lining

17 Nov 2009

Al de Molina must feel aggrieved to lose his job. But his replacement, Michael Carpenter, oversaw Kidder Peabody s demise and helped build the monster that became Citigroup. If he can make a comeback, de Molina, whose main fault seems to be outspokenness, should have no trouble.

AIG pay standoff entirely predictable

11 Nov 2009

It s what happens if a government props up a private company, makes a show of keeping it running like one, and then interferes. CEO Benmosche s threat to quit may be a bluff. But the lesson is that if there s no clear turnaround plan firms should be wound down, not bailed out.

Rewarding bosses for going shopping is daft

4 Nov 2009

Pfizer awarded CFO Frank D Amelio a $1.2m bonus for his role in buying rival Wyeth. Executives may need incentives to sell it often means they ll lose their job. Paying for purchases, on the other hand, encourages empire building.

US pay tsar plays with fire

22 Oct 2009

Ken Feinberg will soon unveil his plan to limit pay at Tarpdependent firms. With the best intentions, there could be damaging unintended consequences, like skewed incentives and mass defections potentially creating a mess. Let's hope Feinberg has asked the right questions.

Galleon wind-down at least shows market at work

21 Oct 2009

Unlike their bailedout brethren in the banking world, hedge funds live and die on their performance and reputation. Founder Raj Rajaratnam s indictment on insidertrading charges is an extreme case. But at least Galleon isn t too big to fail, and investors can move on.

Credit Suisse takes up bonus challenge

20 Oct 2009

The Swiss bank, lately forward thinking on pay, has moved first to set out details based on G20 guidelines. Higher base salaries might raise eyebrows and upside on deferred cash seems a bit rich. But clawbacks and the use of return on equity as a benchmark make good sense.

Sumner Redstone loses money – but not his grip

14 Oct 2009

The media mogul is selling Viacom and CBS stock to pay down debt at his holding company. After the offering, his economic interests in both will be around 7%. But he ll keep more than 70% of the voting control. One more reason to avoid the stock.

Axa is latest case of France’s bendy governance

8 Oct 2009

The insurer s CEO will take on the chairman s job too, while abolishing its dualboard structure. It s the latest example of a big French company tailoring its management structure to suit one man. France SA must realise that governance principles shouldn t be so pliable to whim.

Citi’s Pandit gets equivalent of triple-A rating

8 Oct 2009

The recruitment firm Citi hired to survey its management to appease regulators unsurprisingly gave the CEO high marks. But Pandit deserves to stay for other reasons. Either way, the board should prepare for succession to avoid a BofAlike fiasco.

Ken Lewis finally bows to the inevitable

30 Sep 2009

The BofA boss s mishandling of the Merrill merger kicked off an embarrassing and potentially harmful series of distractions. His belated retirement should clear the air somewhat. And it may allow his successor to capitalise on a promising franchise depending who gets the nod.