HK’s move to promote women in boardroom is overdue 1 Nov 2012 The pro-business city is catching up with financial centres and Asian neighbours in proposing listed companies state their diversity policy. As in many other countries, women are under-represented on boards. Improving awareness of diversity is the least regulators can do.
Apple infighting may be sign of golden age waning 30 Oct 2012 The company’s genius has been the smooth integration of art and engineering. Steve Jobs kept an uneasy peace between the two. With mobile software chief Scott Forstall out, design guru Jony Ive will rule over hardware and software. Apple needs mastery of both.
Pandit putsch is setback for U.S. board governance 26 Oct 2012 Separating the jobs of chairmen and chief executives is generally to be encouraged. But the logic is undermined by recent events at Citigroup. Chairman Mike O’Neill’s ouster of ex-CEO Vikram Pandit is looking increasingly like a power-grab rather than a service to shareholders.
Eike Batista comes to his own rescue 26 Oct 2012 With his energy and infrastructure empire a mess, the Brazilian billionaire is trying to hold things together. He offered to buy $1 bln of oil company OGX stock at a premium and is also raising his stakes in two other units. In this case, shareholders should beware the buyer.
Cynthia Carroll’s departure won’t fix Anglo 26 Oct 2012 After years of sub-par returns, Anglo American and its chief exec are parting ways. Carroll’s early missteps hurt, but she did deliver needed cultural change. Her successor may gain from more industry experience, but Anglo’s largest problems are mostly out of management’s control.
New York Times cash can stretch only so far 25 Oct 2012 The U.S. newspaper publisher’s ugly Q3 erased about 15 pct of its market value and put further demands on a roughly $1 bln war chest. Shareholders, including the Sulzberger family, will want a dividend and pension funds are short. The Times, however, could use the cushion.
BBC discovers curse of successful institutions 23 Oct 2012 The UK broadcaster is engulfed in a scandal for its faulty handling of a star and his alleged sexual misdeeds. The BBC’s failures already look painfully obvious. But as BP, the Catholic Church and many others have discovered, self-correction is easier to preach than to practice.
Farallon founder navigates hedgie succession trail 22 Oct 2012 Hedge fund moguls aren’t known for achieving smooth transitions to new management. Some struggle to let go, fail to retain would-be successors, or see investors flee. But Tom Steyer, who started the $20 bln San Francisco-based Farallon, seems to have checked the right boxes.
RBS’s CEO succession gains urgency post Panditgate 19 Oct 2012 Recent wins mean Stephen Hester has achieved much of his turnaround plan that was due to end in 2013. Meanwhile, Vikram Pandit’s ugly exit from Citi shows it’s wise for bank bosses to quit while ahead. RBS’s board should put two and two together and prepare for life after Hester.
Pandit succumbs to “three strikes you’re out” rule 16 Oct 2012 A trio of failures, not all of his making - pay, dividends and Smith Barney - lost him the confidence of shareholders, regulators and the board. It was time to go. Mike Corbat is solid. But radical change like a value-enhancing breakup would be a more surprising move for Citi.
Vivendi starts to take a T out of TMT 16 Oct 2012 The French group was built on the duff notion that telecoms, media and technology assets benefit from common ownership. Nowadays only bondholders agree - and boss Jean-Rene Fourtou seems willing to sell the telecom operations. But a slimmer Vivendi wouldn’t look more coherent.
Investors may live with outrageous News Int payoff 16 Oct 2012 Rebekah Brooks, the former CEO of News Corp’s UK newspapers, is reported to have received a 7 mln stg “payoff”. Unspecified sums for legal fees may well reduce any personal payments. Only the hope that News Corp is reforming itself could dampen shareholder objections.
Nat Rothschild better out than in at Bumi 16 Oct 2012 The financier’s resignation from the troubled coal company he helped create smoothes the way for a proposed exit by Bumi’s Indonesian partners. As an outsider Rothschild can argue publicly for giving minority shareholders full value - and maybe restore his reputation on the way.
Citi’s mediocrity shines through dark quarter 15 Oct 2012 Two big Q3 hits left the mega-bank with just a 1 pct return on equity. Excluding them boosts net income to $3.3 bln, though still with a meager ROE flattered by loan loss releases. Operating leverage progress is welcome, but it’s time for CEO Vikram Pandit to raise Citi’s game.
BAE needs a new chairman 12 Oct 2012 The UK defence company had to embrace the EADS deal because it was too weak to go it alone. Dick Olver, the chairman, must carry the can both for allowing BAE to slide and for poor management of the attempt to secure salvation-by-merger. Fresh leadership is required.
Wall Street, City pay still must fall by a third 11 Oct 2012 Morgan Stanley’s boss is right that investment banking is overstaffed and overpaid. The bill for traders, advisers and money managers at seven global firms needs to drop by about $30 bln, a Breakingviews calculator shows, to give shareholders a shot at decent returns on equity.
If buyout firms conspired, they were bad at it 11 Oct 2012 Newly disclosed emails appear to support allegations that Blackstone, KKR and others colluded to keep prices down. Yet many of those pre-crisis mega-deals like Freescale and TXU have turned out terribly. Guilty or not, the case should worry investors in private equity firms.
Executives spared prison should at least lose jobs 10 Oct 2012 With criminal charges unlikely, watchdogs pursue financial fraud by suing the likes of Wells Fargo. But shareholders, not officers, usually foot the bill. Strong deterrence demands honchos pay, too. Banning them from executive suites might best serve corporate governance.
RBS’ investment bank strategy still half-formed 9 Oct 2012 The UK bank raised eyebrows for dumping its capital-light advisory franchise, including venerable Hoare Govett. But the move now looks clever. Still, if the investment bank is better off without M&A and equities, RBS may yet be better off exiting investment banking outright.
Avon CEO at last has free hand for makeover 5 Oct 2012 Andrea Jung, the former boss of the U.S. beauty company, will relinquish her role as executive chairman at the end of the year. Sidelining Jung is overdue given the mess she left behind. Sheri McCoy, CEO since April, now has a better chance of rejuvenating the Avon Lady.