Corporate Governance

Guest view: ESG ratings aren’t reliable enough

10 August 2018

Socially responsible investing has become a $20 trln-plus industry, but how do we know if firms are actually doing well by doing good? Shiva Rajgopal and Richard Foster pinpoint four big problems in measuring the environmental, social and governance impact of investments.

China Tower debut reveals costs of tech leadership

8 August 2018

The newly listed towers firm trades at a low valuation like its telecom peers. Investors know that politics will come before profit as a costly build-out of 5G looms on the horizon. It’s a keen reminder of the price Beijing must pay to achieve cutting-edge tech dominance.

Australia’s bruised CBA shows signs of resilience

8 August 2018

The country's largest bank has endured public scrutiny, fines and executive departures. But a near-5 pct drop in full-year earnings, the first decline in almost a decade, belies a more encouraging picture for businesses like home loans. New boss Matt Comyn has tools to rebuild.

Viewsroom: CBS’s $184 mln #MeToo challenge

2 August 2018

That’s what CEO Les Moonves gets if he leaves the U.S. TV network – unless fired for cause. That’s rare in corporate America. But allegations he sexually harassed women put the board on the spot. Plus: Hong Kong battles the Big Apple for IPOs. And China faces a vaccine scandal.

GAM plays canary in bond liquidity risk coalmine

2 August 2018

Redemption requests spiked after the Swiss hedge fund suspended one of its asset managers. Turning down such demands prevents less agile clients from being penalised. But the move highlights the industry-wide problem of how little it can take to gum up apparently liquid funds.

Google’s China re-entry plan looks evil and risky

2 August 2018

The internet giant is planning a censored search engine for China, The Intercept reports. Taking share from local champions like Baidu could prove profitable. But Beijing wants to get its hands on Google's AI expertise. Morality aside, a return would be dangerous business.

Rio’s shareholder bonanza hints at elusive M&A

1 August 2018

The giant miner reported a sturdy 12 pct rise in first-half earnings, narrowly missing forecasts. It will, though, hand back $7.2 bln, including a record dividend. That suggests long-expected deals are hard to find despite shaky markets, cheaper shares and M&A noise elsewhere.

How Sergio Marchionne saved Fiat and Chrysler

30 July 2018

The automakers’ former boss, who has died at 66, rescued both from the wrecker’s yard. His push for breakups and consolidation also helped produce better shareholder returns than his main rivals. A new selection of Breakingviews columns offers a taste of his 14-year tenure.

Lax corporate governance damns China Inc

24 July 2018

A new report reveals slow progress improving clarity and accountability. Weak controls are so rampant that foreign and local investors alike prefer state dinosaurs to independent companies. More boardroom meddling by Beijing will further deter investment in the private sector.

China’s fiscal nudge betrays growth jitters

24 July 2018

The government is adding some $10 bln of corporate tax cuts as part of a broader policy push. It follows tussles between the central bank and the finance ministry over how to support an economy that just expanded 6.7 pct. Speed is as much a priority as rebalancing growth.

Review: The Lehman saga told by its Brothers

20 July 2018

The Wall Street firm failed a decade ago. A dazzling new production of “The Lehman Trilogy” reminds us how it began 164 years earlier. The founding siblings and their offspring tell how immigration, financial innovation, and periodic crises set the stage for the final collapse.

Aussie tycoon hammers home overboarding message

20 July 2018

James Packer resigned from a whopping 22 more directorships after he quit the Crown Resorts board for mental health reasons. Campaigns against such overstretched executives are on the rise, as evidence suggests returns can suffer. Companies would be wise to demand greater focus.

Race to governance bottom won by China’s Pinduoduo

18 July 2018

The shopping app’s owner apes Alibaba with a partnership that controls the board and an insider committee on top. It then adds super-voting stock for founder Huang Zheng, who is a member of all three groups. Investors who buy into the $1.6 bln IPO are just along for the ride.

Goldman gets a B-minus on governance

17 July 2018

Strong quarterly earnings may be a reassuring backdrop for boss Lloyd Blankfein’s retirement. But making David Solomon chairman and CEO muddies the Wall Street firm's succession. Splitting the roles would be better, and there’s already a good candidate on the board.

BYD’s football fumble salts investor wounds

17 July 2018

The $17 bln Chinese car and battery maker says a fraudster struck deals in its name, including with Arsenal. BYD has already squandered a rally in electric vehicle stocks; its muddled response to this scandal will vex stakeholders like Warren Buffett. Patience could run out.

Chinese shopping-app IPO travels long last mile

17 July 2018

Shanghai-based Pinduoduo is seeking a $20 bln valuation in a New York debut. Sales are surging, but its social-networking e-commerce business model targeted at lesser-known areas of China may perplex overseas investors. Unwelcome comparisons to Groupon and Zynga are possible.

Sonos IPO sounds like a sales pitch to Amazon

9 July 2018

The wireless-speaker maker plans to go public and may target a $3 bln valuation. That’s pitched high for a firm facing stiff competition and losing money on barely double-digit sales growth. But it’s a trifle for Amazon CEO Jeff Bezos, who can mimic Apple’s success with Beats.

Malaysia taps brakes along China’s Belt and Road

5 July 2018

Prime Minister Mahathir Mohamad has suspended work on a $20 bln rail link between his country’s east and west coasts. It’s a rare setback for Beijing's massive infrastructure initiative. The project's importance, though, means Kuala Lumpur can afford to fight for a better deal.

China eases HNA’s glide path

19 June 2018

The troubled conglomerate has billions in debt coming due soon. Official pressure on banks to support HNA bonds could therefore help it refinance, minimising the risk of an unplanned financial accident. That also buys time for more selloffs to further sharpen its focus on travel.

Italian corporate finance suffers political shock

18 June 2018

The country’s election and its turbulent aftermath contributed to a sharp drop in capital markets activity. Despite still-buoyant M&A, total investment banking fees are down 30 pct year-on-year. This is bad news for banks, but worse still for local companies seeking funding.