Manifest-I - Comment

German governance requires reform
Richard Northedge, Consultant Editor

April 2005
 

Stock exchanges should be in the vanguard of corporate governance, setting an example to all the companies whose shares they trade. The failure of Deutsche Börse to demonstrate a commitment to good governance is a warning about the other companies using that exchange, but exposing Germany’s governance failures to a wider world may hasten the necessary reform. More >>

Allowing companies to display CSR credentials
Michael Solomon, director SEE Potential

SEEcompanies.com is a new forum in which businesses set out their social, environmental and ethical (SEE) policies for public scrutiny, comment and rating. Participant companies must answer 50 challenging questions on 9 broad topics including human rights, corporate governance, environmental management and customer service. More >>

Governance News

Financial Director Turnover
Retailers undergo board changes

There has been a high rate of churn among financial directors (FDs) this year. A search of the Manifest database has found that within the boards of FTSE 100 companies the resignations of 10 FDs have been announced or come into effect.
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Company Law Bill
Auditor liability reform welcomed

The Department of Trade and Industry's recently published Company Law Reform white paper is a step in the direction of Sarbanes-Oxley although it is not as tough according to Martyn Jones audit partner at Deloitte & Touche. More >>

American International Group
Improper accounting admitted

American International Group (AIG) delayed the filing of its 2004 Form 10-K as it admitted that documentation related to a transaction it carried out with General Re, a subsidiary of Berkshire Hathaway, involving two tranches of $250m each, was improper. More >>

Shareholder voting report
Myners concludes that more work to do

Paul Myners concluded that more work was needed to improve the proxy voting process for institutional shareholders in his progress report one year after his first Review of the impediments to voting UK shares was produced. More >>

Audit Quality Forum
Policy proposals passed to government

The Audit Quality Forum has agreed that shareholders should be given statutory rights providing them with more access to company auditors. More >>

OFR
ICAS criticises ASB standard

The Institute of Chartered Accountants of Scotland (ICAS) has urged the Accounting Standards Board (ASB) to undertake a substantial re-edit of its proposed Operating and Financial Review (OFR) Reporting Standard. ICAS was responding to the ASB’s reporting exposure draft of OFR.  More >>

Review of Turnbull Guidance
Investors want more meaningful disclosure

There is broad support for the Turnbull guidance on internal control which is contained in the Combined Code in the responses to a consultation by the Financial Reporting Council (FRC) review group. It is gathering evidence to assess whether any changes to the guidance, published in 1999, need to be made. More >>

SEC
Donaldson spells out governance thoughts

Companies, management, and above all directors must redefine corporate governance with practices that go beyond merely complying with new rules, according to William Donaldson, chairman of the US Securities and Exchange Commission (SEC), in a speech to the Directors Education Institute at Duke University in North Carolina.  More >>

London Stock Exchange
Bids referred to Competition Commission

The Office of Fair Trading (OFT) has referred the proposed bids for the London Stock Exchange (LSE) by Deutsche Börse and Euronext to the Competition Commission (CC). More >>

Worldcom Fraud
Ebbers found guilty

Bernie Ebbers, former WorldCom chief executive, has been found guilty of charges in connection with the $11bn fraud at the company. More >>

Hollinger
Legal battles continue against Black and others

Hollinger Incorporated, the Canadian-listed holding company that boasts its interest in the newspaper publishing group, Hollinger International, as its primary asset has commenced legal action in Canada against Ravelston Corporation, Moffatt Management, Black-Amiel management, and its former directors and officers Conrad Black, David Radler, Jack Boultbee and Peter Atkinson.  More >>

Reducing Regulatory Burden
Number of regulators to be cut

The government’s recent Budget included a package of reforms to tackle the burden of regulation on business, while maintaining standards of protection for the public, consumers and employees. This included accepting the recommendations of the Review by the chairman of J Sainsbury, Philip Hampton. More >>

GovernanceMetrics International
Small caps reduce US governance score

Small cap companies have weaker governance structures than large cap concerns, according to corporate governance research and ratings agency, GovernanceMetrics International (GMI), which has released it latest governance ratings on 3,220 global companies. More >>

Boeing
Chief executive quits over affair

Harry Stonecipher has resigned as president and chief executive of the aerospace company Boeing. The resignation followed an investigation by internal and external legal counsel of the facts and circumstances surrounding Stonecipher’s relationship with a female executive in the company who did not report directly to him.  More >>

Sony Corporation
Electronics giant undergoes board shake-up

Sony Corporation has announced the creation of a new management structure. This will be effective from 22 June, subject to approval at the AGM that day, although the management transition began immediately.   More >>

Walt Disney
Eisner moves over for Iger

Companies, management, and above all directors must redefine corporate governance with practices that go beyond merely complying with new rules, according to William Donaldson, chairman of the US Securities and Exchange Commission (SEC), in a speech to the Directors Education Institute at Duke University in North Carolina.  More >>

Review of Actuarial Profession
FRC to take over oversight role

Sir Derek Morris’s final report of his review of the actuarial profession, recommended that profession should be subject to independent oversight by the Financial Reporting Council (FRC). More >>

British Airways
Walsh picked to replace Eddington

Willie Walsh, former chief executive of Aer Lingus, has been appointed as chief executive of British Airways (BA). Walsh will become chief executive-designate on 3 May. Rod Eddington, current chief executive, will retire at the end of September, at which time Walsh will become chief executive. More >>

Governance in brief.....

Time Warner pays fine following claim of fraud
The US Securities and Exchange Commission (SEC) has charged Time Warner with materially overstating online advertising revenue and the number of its internet subscribers, and with aiding and abetting three other securities frauds. The company was also charged with violating an SEC cease-and-desist order issued against America Online. More >>

Governance Resources

Looking for Governance books? See the Manifest Bookshop for more details.
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Corporate Social Responsibility

Business in the Community
Westpac goes straight to the top

A new entrant, Australian bank, Westpac Banking Corporation, topped Business in the Community’s (BITC) 2004 corporate responsibility (CR) index and was the highest scoring new participant in the BITC’s 2004 environment index. More >>

Climate Change
US Shareholder action prompts more disclosure

US oil and gas companies - Anadarko Petroleum, Apache, ChevronTexaco, Unocal, Tesoro and Marathon Oil - have taken action to disclose their potential financial exposure from climate change and develop strategies to improve their strategic positioning as international pressure grows to reduce greenhouse gas emissions and promote renewable energy sources. More >>

Corporate Manslaughter Bill
Individual directors not threatened

A draft bill that would create a new offence of corporate manslaughter has been published by the Home Office. The bill is designed to make it easier for companies that have shown little or no regard for the safety of their workers or members of the public to be prosecuted for a specific criminal offence. More >>

CSR in brief.....

Tougher environmental criteria catches out firms

An additional 61 companies worldwide have been admitted to the FTSE4Good Index Series after meeting the index criteria. There were 21 new companies admitted from Japan – the largest national increase of representation. This was followed by the US, with 12 new entrants, and the UK, with seven. More >>

Academic Roundup

Manifest-I presents a summary of recently released academic papers on international corporate governance issues. More >>

Conferences

Topical governance and CSR-related conferences. More >>

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