Corporate Governance

Holding: Supreme Court due for a dose of activism

10 December 2018

Like a dozy board, the U.S. tribunal has left confusing financial-fraud laws largely untouched for years. Yet a case argued last week - and a new justice - offer the chance to set the rules and Wall Street watchdogs straight. Shaking up the status quo would add value in the law.

Clash of activists could become feature in Japan

6 December 2018

Pushy U.S. hedge fund Elliott voted in favor of $5 bln Alps buying the rest of car navigation systems maker Alpine. Feisty Oasis had long been fighting to block the deal. Such rifts are rare, but may rise in a country where consolidation of affiliates is a growing battleground.

Ted Baker is stuck in a bear hug trap

4 December 2018

Ray Kelvin’s habit of embracing employees has become a liability for investors. If an internal probe shows he is culpable of more than unwanted coziness, the fashion brand could push its largest shareholder away. Even if he holds on, Ted Baker will grapple with other challenges.

Ghosn’s jail time risks poisoning alliance talks

4 December 2018

Nissan's former boss, accused of understating his pay, could see out the year behind bars, a local paper says - without being charged. His harsh treatment widens the gulf between Paris and Tokyo, making a deal on future ties between the Japanese carmaker and Renault even tougher.

India is hit hardest by Asia’s $4 trln water risk

30 November 2018

That’s how much GDP is at stake if the region doesn’t better manage the 10 Himalayas-fed rivers its economic hubs rely on. China appears to be steering a good course. But India isn’t fixing the governance mess exposed by rising water stress. That threatens economic growth.

Deutsche Bank’s new dark clouds have silver lining

29 November 2018

The lender has been hit by police raids linked to clients’ alleged tax evasion and speculation its investment bank head could leave. Yet Panama Papers issues have thus far not meaningfully hit European banks. And Deutsche’s traders should have a decent 2019 – whoever’s in charge.

Hadas: How to stop radical CEOs from going rogue

28 November 2018

Renault and then Nissan hired Carlos Ghosn to subvert conventions. But the will to transgress is hard to keep within boundaries. Companies have four defences against talented but errant bosses: bureaucracy, conscience, boards and punishments. All of them can be strengthened.

Singapore offers lessons in corporate succession

27 November 2018

The Lion City’s ruling party has set in motion a careful handover, identifying the man who will eventually become premier. Boardrooms, against which the island gauges itself, can learn from the planning. Both, however, would benefit from more diversity to prepare for shocks.

Short-seller tries tricky electric-car U-turn

22 November 2018

Citron Research, known for negative reports on stocks, is now backing Chinese manufacturer Nio as well as Tesla. Conceding the dominance of Elon Musk’s creation and then betting on a Tesla rival seems inconsistent. It’s a reminder that winners are as hard to pick as losers.

Nissan puts Japan’s governance drive into reverse

20 November 2018

The Carlos Ghosn fiasco suggests derisory oversight by a board whose few independent directors include a race-car driver. Ernst & Young ShinNihon, auditor of Olympus and Toshiba, may have done sloppy work too. The restoration of faith in Japanese boardrooms has been damaged.

RBI’s piggy bank can stand a New Delhi raid

20 November 2018

Under government pressure, India’s central bank will consider cuts to over $100 bln of reserves. Its capital cushion looks generous next to BRIC peers, but the country’s large budget deficit, its dependence on foreign capital and the danger of a bad precedent demand caution.

Facebook’s higher calling is now a liability

19 November 2018

The social network is getting grief from U.S. lawmakers for hiring Washington consultants to fight critics. Many companies do that, including older tech firms. Facebook, though, has styled itself as more than just a company. Mark Zuckerberg is now tripping up on that high bar.

Renault-Nissan pays price for Ghosn key-man risk

19 November 2018

Both carmakers’ shares tanked after Nissan said its chairman had understated his income and might leave. With Carlos Ghosn also Renault CEO, the two groups are reliant on one big hitter to solve their lopsided partnership. That’s a big problem if he’s no longer there.

JD governance overhaul becomes more urgent

16 November 2018

The $35 bln Chinese web retailer is expected to post another fall in quarterly profit. Its shares are down by nearly half this year. A rape allegation against boss Richard Liu has left a cloud over JD. Walmart and other big backers have good reason to urge him to loosen his grip.

Mark Zuckerberg pushes wrong kind of independence

15 November 2018

Facebook’s CEO is setting up an external committee to police fake news and hateful content after more revelations about how he and others dealt with Russian meddling. But outsourcing decisions won’t fix Facebook’s culture. Removing Zuckerberg as chair would be a good first step.

China’s impact investing is an expat project

15 November 2018

Global institutions want to extend ESG criteria to the PRC. But domestic share owners simply expect returns. Meanwhile, reliable information is scarce, investors and companies talk past each other, and there are other governance priorities. For now it’s looking like a luxury.

Pharma upset derails remake of Samsung’s heir

15 November 2018

Jay Y. Lee championed the $20 bln Samsung BioLogics as a new engine of growth at the South Korean conglomerate. Now the arm faces delisting for breaking accounting rules ahead of its IPO. Such a punishment would be harsh but also fit with Seoul’s new resolve to rein in tycoons.

Chinese phenom Pinduoduo has some explaining to do

15 November 2018

The $19 bln favoured e-commerce site for frugal “aunties from Wuhan” is inflating its top line and understating its costs, alleges short-seller Blue Orca. If true, the charges are damning and threaten PDD’s superlative as the fastest-growing internet seller on the planet.

PG&E woes show climate is clear and present danger

14 November 2018

The California utility may be to blame for the wildfire that’s claimed 48 lives. Its value has halved and it may run out of cash. The planet’s warming is already worsening fires, floods, and water scarcity. Yet most investors and companies still treat it as a longer-term risk.

Snap shareholders deserve little sympathy

14 November 2018

Some are suing the social-media firm for misleading them before its IPO about competition from Instagram. Now U.S. watchdogs are conducting a probe. Bad conduct deserves punishment. But investors willingly bought stock with no rights in an immature company with lots of rivals.