governance

Nomura urged to “hunker down” – literally

June 1, 2012 12:47 pm by Andrew Hill

Corporate governance can be dull. But Nomura’s annual meeting on June 27 will be livened up no end if the Japanese bank’s chairman allows any discussion of shareholder proposal 12, “regarding overhaul of basic daily movements”. Here it is in full:

Details of Proposal: It should be stipulated in the Articles of Incorporation that all toilets within the Company’s offices shall be Japanese-style toilets, thereby toughening the legs and loins and hunkering down on a daily basis, aiming at achieving 4-digit stock prices.

Reasons for Proposal: The Company is on the verge of bankruptcy. In other words, it is the time to hunker down. The Company cannot avoid bankruptcy if it merely adopts a spiritual approach such as encouraging sales persons to speak in a loud voice, but the Company can surely avoid failure if they straddle over a Japanese-style toilet every day and strengthen their lower body. If it cannot, it can only be accepted as a bad luck.

Tags: governance, Japan, Nomura
Posted in Banks | Permalink

Murdoch: “wilful blindness” is the crucial charge

May 1, 2012 1:29 pm by Andrew Hill

Rupert Murdoch

It will be a shame if bitter and partisan debate over whether Rupert Murdoch is “a fit person to exercise the stewardship of a major international company” obscures the more important conclusion of the UK parliament’s culture, media and sport committee on phone-hacking: that he and his son James were wilfully blind to what was going on.

Whether BSkyB, controlled by the Murdoch-owned News Corp, is a “fit and proper” owner of a broadcasting licence is a question for Ofcom, the regulator, which has now entered an “evidence-gathering” phase of its probe.

But as even the dissenting members of the committee said on Tuesday, if the “fit person” line had been omitted from the report, they would have voted unanimously to back it, including the charge that the Murdochs oversaw a culture of wilful blindness. Read more

Tags: BSkyB, corporate culture, governance, James Murdoch, Leveson inquiry, News Corp, Rupert Murdoch, wilful blindness
Posted in Business, Media, Politics, Regulation | Permalink

Would-be directors: under-prepared, over-confident

April 25, 2012 3:15 pm by Andrew Hill

The greenest job applicants know that to make any sort of impression on their prospective employer they must at least know something about the company where they wish to work and the position for which they’re pitching. That lesson appears to have been lost, however, on many of the experienced hands seeking to join the boards of Britain’s financial companies.

Hector Sants – outgoing chief executive of Britain’s Financial Services Authority – used his valedictory speech on Tuesday to underline how would-be directors are failing even the most basic examination of their credentials for high office. Read more

Tags: Financial Services Authority, governance, Hector Sants, recruitment
Posted in Banks, Management, Regulation | Permalink

Don’t stop banking on Lehman Sisters

March 27, 2012 3:55 pm by Andrew Hill

The problem with conventional wisdom is that academics will insist on testing whether it is truly wise.

So the popular assumption that Lehman Brothers would not have collapsed if it had been Lehman Sisters (to quote, among others, European commissioner Viviane Reding and former UK minister Harriet Harman) seems to take a knock from a new discussion paper published by Germany’s Bundesbank. It concludes:

Board changes that result in a higher proportion of female executives also lead to a more risky conduct of business.

Tags: Bundesbank, gender, Germany, governance
Posted in Business, Management, Regulation | Permalink

Connubial bliss in the VW boardroom

March 12, 2012 4:26 pm by Andrew Hill

“Day by day Volkswagen… appears less like a public company, and more like a complex oligarchy.” That’s how The Economist began a critique of the German carmaker’s flawed corporate governance – in December 2005.

Not much has changed since, as the latest developments in Wolfsburg suggest. In spite of periodic protests about governance, Ferdinand Piëch, VW’s chairman, has reinforced his hold over the group and is expected to seek another five-year term in the chair. The latest news is that his wife, Ursula, will stand for nomination to the board. This may be, as the FT wrote on Sunday, part of “a fairly well-established tradition of spouses taking up powerful positions at German companies”, citing the board positions held by Friede Springer at Axel Springer, and Liz Mohn, at Bertelsmann. But to anybody outside this tradition of family-controlled companies, it looks distinctly odd. As Dow Jones pointed out in its account, “there are no reports…. that would suggest she has any high-profile corporate management experience“. Read more

Tags: Alan Mulally, Ferdinand Piëch, Ford, governance, Martin Winterkorn, Porsche, Volkswagen
Posted in Autos, Management, Manufacturing | Permalink

Too many cooks at KPN – or too few?

January 4, 2012 3:46 pm by Andrew Hill

It’s more common to cite strategic than structural differences as a reason for resignation. But Carla Smits-Nusteling – one of the most prominent women in Dutch business – is quitting KPN, the telecoms group, because, in the words of Tuesday’s statement, “she does not agree with the internal governance of the company in the new executive structure”.

Ms Smits-Nusteling, KPN’s finance director, sat on its management board (which is itself overseen by a supervisory board, in the continental European style). KPN has expanded that board from three people to 12, by bringing in all the divisional heads.

This could be about power. After all, a one-third say in decisions about a company’s operational direction is different from a one-twelfth say. Jos Versteeg, an analyst at Theodoor Gilissen, a Dutch bank, told Dow Jones:

The new management structure might compromise some of [Ms Smits-Nusteling's] executive authorities, handing over more power to the CEO, which could be the reason for her dissatisfaction.

Tags: Carla Smits-Nusteling, governance, KPN, Nokia
Posted in Telecoms | Permalink

The perils of putting the CEO in the chair

December 13, 2011 11:27 am by Andrew Hill

Old habits die hard in US corporate governance: Pfizer has just announced it will hand chief executive Ian Read the chairmanship. That re-creates the dual chair-CEO role and goes against the slow US trend towards splitting the two top board jobs.

According to Spencer Stuart, the headhunter, 41 per cent of top US companies now separate the roles (though the chairmanship is too often held by the ex-CEO), compared with 26 per cent in 2001. So, as governance expert Lucy Marcus tweeted on Tuesday, Pfizer’s decision is an “astonishing step backward“. Read more

Tags: BP, Carl-Henric Svanberg, governance, Ian Read, Pfizer, Royal Bank of Scotland, Volvo
Posted in Business, Management, Pharmaceuticals, US | Permalink

Road from Olympus should lead to reform

October 31, 2011 5:10 pm by Andrew Hill

You know a corporate scandal is serious when prime ministers and heads of state start to mention it. The fact that Japan’s premier Yoshihiko Noda took time in an FT interview on Monday to talk about the problems at Olympus is doubly significant, therefore. As our correspondents Michiyo Nakamoto and Mure Dickie point out, it’s “highly unusual for a Japanese prime minister to comment on events involving a private company”. Here’s what Mr Noda said:

What worries me is that it will be a problem if people take the events at this one Japanese company and generalise from that to say Japan is a country that [does not follow] the rules of capitalism. Japanese society is not that kind of society.