Thursday, May 29, 2008

Large-caps set high corporate governance standards, but independence still an issue for some

For those that have felt the corporate governance requirements under SOX were unreasonable, consider these findings in Austrailia regarding corporate governance practices. The themes sound all too familiar.

Australia’s largest publicly listed companies generally meet all aspects of best practice guidelines for corporate governance; however full independence still remains a key issue for some major companies.

The 2008 BDO Kendalls Large-Cap Corporate Governance Survey, released today, shows that while independence at the board level is not an issue for most (70%) of Australia’s top 20 listed companies, a number of large companies do not meet best practice guidelines in relation to their audit, remuneration or nomination committees.

The survey methodology used has been developed by BDO Kendalls over a number of years and in some cases sets a higher standard than the ASX best practice principles for corporate governance.

Areas highlighted included some companies having audit, remuneration or nomination committees that were either not made up of all independent directors or the chair was not independent. The survey findings are based on the 2007 annual report disclosures of the 20 largest Australian listed companies by market capitalisation as at 13 March, 2008.

Large-caps set high corporate governance standards, but independence still an issue for some

Labels: Austrailia, BDO Kendalls Large-Cap Corporate Governance Survey, corporate governance

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Tuesday, April 22, 2008

SOX Life Blog: Knowledge Management and Corporate Governance

Knowledge Management (KM) is more than a buzz phrase running through organizations, so if you were hoping this discussion was going to abruptly end, think again.

With so many organizations facing labor shortages as the baby boomers look toward retirement, it becomes not only a staffing but a very practical governance conversation about addressing this talent gap. What would happen if all your senior talent left tomorrow?

I recently received an email from a researcher in Austrailia interested in organizational maturity of KM practices, and how this is viewed in association with corporate governance. I would invite you to participate as well (and ask consultants to consider a key client as well for whom this would be relevant).

Dear Colleagues,

I am Suzanne Zyngier, a Research Fellow at La Trobe University, Australia is conducting questionnaire research into knowledge management (KM) strategies and governance. This questionnaire is unique in investigating the governance of knowledge management which is defined as the implementation of authority to ensure the realization of benefits of KM strategy development and implementation.

This new research will overview conditions globally.This new research is important because it will enhance our understanding of the issues encountered in governance, development and implementation of KM programs. Practitioners and theoreticians need and want to find better solutions to these issues.This questionnaire comprises 20 questions about KM - some text based and some multiple choice, and a section on background information. The questionnaire takes approximately 15 minutes to complete.

SOX Life Blog: Knowledge Management and Corporate Governance

Labels: baby boomer, change management, corporate governance, knowledge management

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Wednesday, March 05, 2008

Good governance pays 18pc more

UK companies with exceptional corporate governance records generate returns 18 per cent higher than those with poor records, according to the Association of British Insurers (ABI).
The study analysed 654 UK FTSE All-Share companies over four years to 2007 using data from the ABI’s Institutional Voting and Information Service, which highlights breaches of good governance using a colour code system.

According to the study, poor corporate governance within a company reduced an industry adjusted return on assets, on average, by one per cent a year.

Illustrating this, the study found $211 invested in a well-governed company returned, on average, $38 more than a poorly governed company.

Good governance pays 18pc more

Labels: ABI, corporate governance, higher returns, ROA, UK

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Monday, February 25, 2008

Speech By SEC Commissioner Kathleen L. Casey: Corporate Governance Issues And Trends

Excerpt from comments on Competitiveness

In the last year, three major studies have called into question U.S. competitiveness. Each concludes that America is losing ground to foreign markets. They suggest that these trends may be caused by foreign markets developing and evolving — no more than a natural growth and maturation in markets abroad.

But they also question whether America's regulatory climate dissuades investment in our markets. For example, one of the reports concludes that our competitiveness concerns derive from needed reform in our legal system and regulatory approach.

In response to these reports, some argue that we must act now, or we will forever lose our competitive edge. Others warn that the concern is overblown and that any reforms would be a 'rollback' of investor protections and could be catastrophic for investors' interests.

For my part, I do not believe this is necessarily a binary choice. On the one hand, the sky is not falling — America's capital markets remain rich, deep, vibrant and attractive; and while we may be losing global market share, there are likely many reasons for this trend, not all of our own making.

Speech By SEC Commissioner Kathleen L. Casey: Corporate Governance Issues And Trends

Labels: Commissioner Casey, corporate governance, market competitiveness, sec

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Scrap the monthly bored meeting

Corporate collapse is in the air once again; loss and recrimination stalks the business world as bankers switch from being money marketers to capital conservers.

Just how much risk capital will be lost during this credit squeeze is unknowable, of course, but it’s unlikely that the squeeze on equity is over yet. Unless there is a sudden re-liquification of the banking system, of which there is no sign yet, more equity will be lost in the scramble to recover debt and some companies will go to the wall.

But it’s to be hoped that we don’t emerge from this crisis with a worse corporate governance system than we entered with. It’s already bad enough.

In fact, there is a good case for regulation to now go the other way: many of the extra burdens placed on boards of directors by previous crises are entirely useless, in my view. Counter-productive even.

Scrap the monthly bored meeting

Labels: board of directors, corporate governance, opinion

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Sunday, February 10, 2008

Corporate governance key to instituting stock market

Corporate governance is an essential condition to the establishment of a stock market, attracting major investment and developing national reserves which will lead to combating unemployment and reducing poverty, said Dr. Yahya al-Mutawakel, the Minister of Industry and Trade, during the launch of a corporate governance conference held last Wednesday. The conference was organized by the Yemeni Businessmen’s Club and the Center for International Private Enterprise (CIPE) in cooperation with the Global Corporate Governance Forum and Hawkamah, the Institute for Corporate Governance.

Good governance involves improving the performance of governmental authorities, private sector and non-governmental organizations (NGOs) in order to improve the income levels of the country’s citizens, al-Mutawakel said.
The role of the private sector is fundamental in achieving socio-economic development. Thus, the Ministry of Industry and Trade established 232 companies with a capital of $60 billion during 2007 and 184 companies with capital of $10 billion in 2006, al-Mutawakel said.

Corporate governance key to instituting stock market

Labels: CIPE, corporate governance, Yemen

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Friday, January 18, 2008

‘SEBI to deal with specific provisions on corporate governance for listed cos’

The new company law is likely to stipulate that specific provisions on corporate governance for listed companies, including the number of independent directors on the board, will be outlined by the Securities and Exchange Board of India.

This would help curb the possible overlaps between SEBI and the Ministry of Corporate Affairs (MCA), an official source said.

“SEBI will have the liberty to prescribe higher standards of corporate governance for listed companies,” he said.

Certain provisions of the new law, to be placed in Parliament soon, had seen the Finance Ministry and the Comptroller and Auditor -General (C&AG) expressing concern. The Ministry was of the view that the law should make only enabling provisions and prescribe a minimum threshold limit, official sources said.

‘SEBI to deal with specific provisions on corporate governance for listed cos’

Labels: corporate governance, India, MCA, SEBI

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Corporate governance survey conducted (Pakistan)

International Finance Corporation (IFC), Securities and Exchange Commission of Pakistan (SECP), and Pakistan Institute of Corporate Governance (PICG) have commissioned and edited a Survey of Corporate Governance Practices in Pakistan 2007.

The survey was meant to assist private and public sector companies to close any gaps between their current practices and the requirements of Pakistan’s Code of Corporate Governance 2002, as well as the guidelines given by internationally recognized best practice.

A barrier to improving corporate governance practices was the
unavailability of qualified professionals to help with the implementation of the
corporate governance practices.

Corporate governance survey conducted (Pakistan)

Labels: corporate governance, IFC, Pakistan, PIGC, SECP

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Wednesday, January 16, 2008

Corporate Governance - are you at risk?

Corporate Governance means more to the communicator than reputation management. When effective corporate governance promotes thriving organisations, market confidence and public trust. Internal communicators have a duty to be aware of the corporate governance responsibilities of their organisation, and to support it and enhance it. But internal communicators lack the language of 21st century business to start the conversation with directors - a knowledge of key corporate governance terms and principles solves this.

A Deloitte study of 800 North American companies published last year found that well-planned and well-executed corporate governance brought about significant business benefits such as: enhanced market confidence and reputation management, reduced risk of loss through fraud, improved acquisition integration, better control over management and information systems, standardisation of processes and controls as well as improved disclosures for stakeholders.

Corporate Governance - are you at risk?

Labels: corporate governance, internal communications

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Tuesday, January 15, 2008

Can the Nonprofit World Govern Itself?

In the wake of several high-profile charity scandals and with observers predicting that Congress will pass legislation similar to the Sarbanes-Oxley Act for nonprofit organizations, Independent Sector convened the Panel on the Nonprofit Sector to create a set of guidelines designed to help groups govern themselves.

Those guidelines, which spell out principles of governance, fund-raising, and management that charitable groups should follow, were approved in October. But several key questions remain. Will nonprofit leaders pay attention to them? Do they go far enough? Are the guidelines enough to satisfy those on Capitol Hill who want to pass new legislation to regulate charities?

Can the Nonprofit World Govern Itself?

Labels: corporate governance, non-profit

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CMA committed to corporate governance practices: Al Jabri

The Capital Market Authority (CMA) is committed to promoting sound corporate governance practices in Oman, Yahya bin Said Al Jabri, executive president of the CMA said here yesterday.

Recently, the capital market regulator had issued an administrative decision forming corporate governance committee to implement a corporate governance plan in Oman by disseminating information on international standards and practices.

The committee, Al Jabri said, comprises nine members representing the public and private sectors, academic and professional institutions.

The committee is chaired by the director-general of legal affairs, enforcement and corporate governance with the membership of the director of the department of corporate governance of the CMA as well as members representing the Diwan of Royal Court, Central Bank of Oman, Ministry of Commerce and Industry, Oman Chamber of Commerce and Industry, Lawyers’ Association, Accountants’ Association and the Omani Economic Association.

CMA committed to corporate governance practices: Al Jabri

Labels: Capital Market Authority (CMA), corporate governance, Oman

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Panel set up to develop practical guidance for audit committees

The Audit Committee Guidance Committee has been set up to develop practical guidance for audit committees.

It will help to strengthen corporate governance practices of listed companies in Singapore, focusing on the practical aspects and considerations of the work of audit committees.

These include the implications of the requirements of the Companies Act and the principles and guidelines of the Code of Corporate Governance. The panel will also identify and describe best practices of effective audit committees.

The committee was set up by the Monetary Authority of Singapore, the Accounting and Corporate Regulatory Authority and the Singapore Exchange.

Panel set up to develop practical guidance for audit committees

Labels: audit committee, corporate governance, guidance, Singapore

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Monday, March 26, 2007

Stuart Basefsky Blog: IWS Documented News Daily: - CORPORATE GOVERNANCE in LATIN AMERICA

Paper Abstract:
This paper analyzes recent trends of Latin America's institutional development regarding to investor protection. In spite of the underdevelopment of the region's financial markets, there is slow movement towards legal reforms intended to protect investors and make regional markets more attractive to investors; current inadequacies in the region's legal institution's generate high levels of ownership concentration, poor access to external equity financing, and narrow equity markets.

The evidence in this paper, based on firm-level data for six countries, shows that, like legal protection of investors, appropriate firm-level corporate governance is linked to lower costs for capital, better valuation, performance, and dividend payments across countries. Firms can compensate for their countries' legal deficiencies by distinguishing themselves through improved corporate governance practices, thus increasing transparency and limiting potential conflict between large and minority shareholders. Firms can additionally look for capital by issuing ADRs, as they have in recent years, although this practice undermines local capital markets.

In the end, firms and regulators must improve their governance structures and shareholder protections if they are to meet the improved benchmarks of developed nations brought about by Asian, European, and U.S. scandals in recent years.

Stuart Basefsky Blog: IWS Documented News Daily: - CORPORATE GOVERNANCE in LATIN AMERICA

Labels: adr, corporate governance, cost of capital, latin america, valuation

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Corporate Governance: A Modern Topic or a Necessity?

Recently there has been considerable interest in the corporate governance practices of companies, particularly since the high-profile collapses of large U.S. firms such as Enron Corporation and Worldcom. This is also happening on the background of legislative and regulatory changes, an increase in the scope of audit and other internal control and risk management activities and increased public scrutiny.

It is also becoming a very modern topic for Russian companies and Russian banks as they are entering capital markets and changing their management styles and structures. It can also be attributed to shareholders leaving the management of companies to professionals.

The question that arises is which corporate governance model will Russia adopt and which will best suit the current market conditions. Is it the liberal model that is common in Anglo-American countries that tends to give priority to the interests of shareholders or the coordinated model that one finds in continental Europe and Japan that also recognizes the interests of workers, managers, suppliers, customers, and the community?

Corporate Governance: A Modern Topic or a Necessity?

Labels: corporate governance, russia

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