Corporate Governance

Corporate sports sponsorship starts to flounder

16 Dec 2008

After 12 years, Vodafone isn t renewing its sponsorship of the English cricket team. It s unclear who will fill the gap. With the biggest corporate sponsors financial services and carmakers under huge pressure to cut costs, it s not just cricket that will suffer.

Gaming billionaires should cut their losses

16 Dec 2008

Partygaming s founder was right to hand himself in to US lawmakers and take a $300m fine, rather than bet on a softer approach under President Obama. After Wall Street s colossal losses, hedge fund collapses and a $50bn Ponzi scheme, gambling is more of a dirty word than ever.

Some $50bn losses hurt more than others

15 Dec 2008

Even if Madoff is one of the biggest fraudsters ever, his deception added a trivial 0.2% to the damage done in world stock markets since July. But this isn t just about money. Deception destroys the vital good of trust, especially when the con man once seemed so charming.

Lenders to Madoff feeders showed astonishing folly

15 Dec 2008

The likes of BNP, HSBC and RBS are nursing losses after providing supposedly collateralized loans to Madoff feeder funds. The collateral doesn t seem to have existed and, in at least one case, Madoff himself was purportedly the custodian.

BAA faces tricky Gatwick sale

15 Dec 2008

There s only one thing worse than having to sell a London airport in these market conditions having to sell two of them. But that s precisely what BAA may be forced to do. Ferrovial, which controls the airport operator, doesn t have much room for manoeuvre.

The Bezzle rears its ugly head, and spectacularly

12 Dec 2008

Frauds are easy to commit in boom times no one is looking. But all is revealed when the cycle turns. That s the Galbraith theory. If true, the alleged multibillion dollar swindle by former Nasdaq bigwig, Bernard Madoff, is only a foretaste of what receding markets will expose.

Facebook adds old-media chaperone as a friend

12 Dec 2008

The social networking wunderkind is putting Washington Post CEO Don Graham on its board. The oldmedia aristocrat is a welcome grownup at Facebook. For Graham, it s also a shot at redemption: he passed on an opportunity to invest in the site before it really took off.

No one will be happy with bonuses this year

9 Dec 2008

Bankers who did well will be angry about huge cuts to pay for the sins of bosses and colleagues. Taxpayers, whose funds kept banks afloat, won t be satisfied unless bonuses are zero. Breakingviews imagines what John Q Public and Simon D Banker might say to each other.

Carphone deserves governance discount

8 Dec 2008

Cofounder and deputy chairman David Ross is departing under a cloud after belatedly disclosing he d pledged his 19% stake in the UK retailer against personal loans. The failure creates a weighty overhang. But it also raises questions about the governance culture at the company.

Formula 1 faces shrinking grid

5 Dec 2008

Honda is quitting the F1 racing championship. The automaker put in a dismal performance last year, despite sporting the largest budget. Its exit gives other beleaguered rivals like Toyota an excuse to make tracks. F1 needs to overhaul the economics of the sport.

Clarity on Swiss bank rules welcome but no panacea

4 Dec 2008

Swiss regulators are forcing UBS and Credit Suisse to hold minimum capital against total assets to absorb potential losses. Crude leverage ratios have drawbacks, and both banks are already degearing. But the new rule may help keep memories from fading as the crisis passes.

Fortis shareholders belatedly use their muscle

3 Dec 2008

They rejected the appointment of diplomat Etienne Davignon as chairman of the collapsed BelgoDutch group. It doesn t undo the vote last year to support the shambolic ABN Amro deal. But it could herald an era of greater shareholder vigilance. It should and not just at Fortis.

The best SFr22m Marcel Ospel ever spent

26 Nov 2008

The former UBS chairman will return bonuses earned at the height of boom, when the Swiss bank was amassing catastrophic subprime mortgage assets. His move has a lot to do with the mood in Switzerland. But it is still welcome pressure on other nonSwiss bankers to do the same.

UK rights issues don’t just need more speed

25 Nov 2008

The UK is accelerating the timetable for rights issues, after banks were blindsided in fundraisings earlier this year. But the length of a rights issue timetable might not be such a critical issue if underwriting and subunderwriting functioned better in the first place.

Carrefour goes for boss with marketing nous

18 Nov 2008

The French retail giant has given the top job to a longtime Nestlé executive. These days retailers work like consumer goods producers, so the choice makes sense. But Lars Olofsson will have to deal with a tough economy, lagging performance and a wily major shareholder.

City’s light touch regulation will become heavier

17 Oct 2008

Lord Turner, the FSA s new boss, says supervision of high impact institutions wasn t good enough. More staff will be needed and they ll have to be paid more so the good ones don t get poached by the City. This is the right approach.

The folly of 2 and 20 is laid bare

17 Oct 2008

A string of former highflying hedge funds are now caught in a vicious spiral of poor performance and redemptions. The managers took out millions, sometimes billions, in the good times. They won t give it back now. Outside investors will regret allowing them oneway bets.

US should go further on bank boss pay

14 Oct 2008

The Treasury is rightly insisting on some restrictions while banks benefit from government cash. But the rules don t look too tough or welldirected. Hank Paulson should like the UK s regulators show more ambition to change things for the longer term.

FSA pay curbs are right but late

13 Oct 2008

The UK regulator has told financial firms to kick their excessive bonus habit. Pay policy must be consistent with good risk management. Guidelines will be clearer and enforcement tougher though that should have happened earlier. For now, the market will cut pay anyway.

UK bailout could put Diamond’s pay in the crosshairs

9 Oct 2008

Taxpayers' cash could come with strings attached for the BarCap boss who pocketed £36m last year. With the government as a shareholder, banks will struggle to show such largesse. Expect Diamond and his peers to look hard for alternative sources of capital.