Corporate Governance

France SA’s flawed governance summed up in Veolia

30 Sep 2009

Directors of the French water company have submissively approved Henri Proglio s wish to retain his chairmanship despite being appointed chief executive of energy group EDF. His dual roles raise serious governance concerns. That board members acquiesced is typical and a shame.

Pay structures belong under regulators’ purview

18 Sep 2009

Incentives influence behaviour. So the Federal Reserve should scrutinise pay practices as it considers US banks' safety and soundness. Making this focus clear has benefits too. It may encourage banks to restrain themselves, and it gives examiners clout if they don't.

Gorman has work cut out as Mack’s successor

10 Sep 2009

Morgan Stanley s smooth transfer of power is a welcome relief after more than a year of nasty surprises on Wall Street. But asset management woes, the integration of Smith Barney, a yoyoing trading strategy and low returns present new boss James Gorman with a challenge.

Bankers and hedgies could profit from Myners plan

19 Aug 2009

The UK City minister wants to stimulate shareholder engagement by segregating registers into voting and nonvoting share classes. But the proposal is a recipe for conflict and arbitrage. Investment banking advisers and traders might be the real winners.

Letter to the Editor: Another voting reform proposal from Myners

13 Aug 2009

The UK City minister responds to Breakingviews.com s concerns about making shareholder votes tradable. Lord Myners has a new proposal for improving shareholder stewardship letting investors divide themselves into voters and nonvoters though a 1for1 issue of nonvoting stock.

Is Myners being paid to upset investors?

11 Aug 2009

It certainly feels like it. The UK City minister has stirred a storm by proposing radical changes to help shareholders be better owners. His latest notion is to let apathetic investors sell their votes. But that effectively means paying holders not to vote a backwards step.

BarCap bonus bonanza shows need for tough reform

3 Aug 2009

A stellar first half has led to accruals for some big paydays. The public will rightly recoil. While Barclays didn t take taxpayer capital, it benefited indirectly from cheap state liquidity and loan guarantees. Investment banks need a more constraining regulatory regime.

Votes-for-loyalty shouldn’t be rejected outright

3 Aug 2009

Lord Myners, the UK City minister, has provoked outcry by proposing that longterm shareholders should have more votes than shortterm flippers. The plan might deter activists from shaking companies up. But it could also encourage shareholders to act less like absentee landlords.

SEC wrist-slap reinforces need for Ken Lewis to go

3 Aug 2009

The Bank of America boss is clinging on to his job even after the regulator accused the firm of misleading shareholders about Merrill bonuses. True, Lewis seems belatedly to be drawing up a succession plan. But that s slow going. And he should have been gone long before now.

Why would anyone sit on a state-controlled board?

24 Jul 2009

The US and UK governments are trying to identify expert, untarnished directors for banks, carmakers and other companies in which they own big stakes Citi, GM and RBS, to name a few. It s not so easy to find people who tick the boxes and are willing to do the job.

Fourth CEO in a year unlikely to rein Freddie in

21 Jul 2009

Charles Haldeman will try to control the US mortgage giant. But the company's political masters are still stuffing the beast with assets. Striking a balance between serving government and longsuffering shareholders has eluded managers with stronger track records.

Tory bank plans deserve two cheers

20 Jul 2009

The UK opposition which is likely to be in government in a year has many good things to say about how to prevent future bubbles. But the Tories are too fixated on abolishing the FSA. This, at best, would amount to rearranging the deckchairs.

UK bank governance plan misses tricks

16 Jul 2009

Bank boards failed to hold executives to account during the bubble; and shareholders failed to monitor the boards adequately. While the governmentappointed Walker Review has some useful things to say on both points, it is insufficiently radical.

Bank accounting standards need revamp

15 Jul 2009

Critics say the current rules for measuring asset values and loan losses have exacerbated the crisis and confused investors, as well being too complicated and sometimes barmy. Rulemakers have embarked on a major cleanup exercise. Hugo Dixon wishes them good luck.

G8 commitment to trade talks may have some legs

10 Jul 2009

Participants in the L Aquila summit have pledged to conclude the Doha trade talks next year. It would be tempting to see this as another empty promise. But the new US administration s commitment to tackle looming protectionism seems more serious than in years past.

News Corp £1m gag claim raises awkward questions

9 Jul 2009

Rupert Murdoch has denied knowing that his newspapers coughed up to settle legal action over stories allegedly based on illegal reporting. If true, the claims pose difficult questions about who really runs News Corp. Murdoch s pervasive influence may even be at risk.

UBS tax case now needs diplomats more than lawyers

8 Jul 2009

Switzerland says it will seize the bank s client information before it lets the US taxman get it. The threat raises the stakes in a looming court battle. The Swiss have made concessions on secrecy, but the US isn t relenting. It might be time for a US compromise.

US mobile crackdown promises iPhones for all

7 Jul 2009

That could be one result if antitrust investigations eliminate deals that restrict devices such as Apple s to one network. Mobile phone makers with hit products won t be happy. But the dominant network operators, Verizon Wireless and AT&T, have more to fear.

Subprime victims may have found their whipping boy

3 Jul 2009

Stefan Ortseifen won't get investors blood boiling like a Bernie Madoff. But the exCEO of Germany s IKB is the first big bank boss to face jail time on charges linked to a lender s collapse. His name doesn't have world recognition. But he may have to do as subprime s bad boy.

Evercore shouldn’t get greedy with GM

1 Jul 2009

The boutique is asking for a $15m success fee for its advice to the bankrupt carmaker. That s on top of some $24m GM already paid. But the bankruptcy overseer has reasonable objections. The government did most of the legwork typically left to an advisor.