Corporate governance - Vigil

Nov. 24 — Getting sustainability on a corporate boardroom's busy agenda may be just a matter of how a particular issue is framed, lawyers and directors said Nov. 20.

When Edward Breen stepped in to run DuPont in October, Andrew Liveris, longtime head of Dow Chemical, saw an opportunity to strike the merger he had long wanted, marrying the two giants of American industry with a combined market capitalization of more than $130 billion.

The US Federal Reserve (Fed) again expressed concerns about the culture at financial institutions this month.[1] This has been a recurring theme since the financial crisis, as regulators in the US and abroad have hit industry players with steep fines for employee misconduct. Since 2008, the largest global banks have cumulatively paid out over $300 billion in fines, with US banks paying about half of that amount.

Over the last two decades, the corporate governance landscape has become increasingly dominated by the view that maximizing the power and influence of shareholders will lead to stronger and better-governed companies. The widespread dismantling of staggered boards and change-of-control defenses, the promulgation of say-on-pay and other governance mandates, and the proliferation of best practices are largely premised on this shareholder rights manifesto. In the aggregate, the changes have been transformative and have precipitated a sea change in the gestalt of Wall Street. 

In case any doubt remains, yet another report has confirmed a link between companies that have more women in leadership roles and those with better returns for investors.

In a recent study, the number crunchers at MSCI, a research-based index and analytics firm, looked at more than 4,200 companies and found that those with more women at the top had returns on equity of 10.1 percent per year, compared with 7.4 percent for those without.

Since the late 1990s, activist hedge funds have become the dominant face of shareholder activism, essentially taking over an arena that was once dominated by pension funds and mutual funds. Hedge fund activism (HFA) has attracted substantial public attention because of the large financial resources of activist investors, their ambitious agendas, and aggressive tactics that are widely covered in the media. But whether HFA is beneficial or detrimental to the shareholders of target firms remains highly controversial. Proponents marshal evidence that HFA is associated with significant medium-to long-run improvements in targets’ cost and investment efficiency and higher profitability and shareholder returns. 

On November 16, 2015, Deputy Attorney General Sally Quillian Yates gave a speech regarding the implementation of the Department of Justice’s recent policy initiatives to facilitate the prosecution of individuals in corporate cases outlined in the “Yates Memo,” issued on September 9, 2015. 

A new report from Citi, surveying the ASX 50, found that the issue of cyber security and how to defend against attacks had become a common topic of discussion among boards, and that policies were being constantly developed to battle ongoing cyber threats.

Retailer says, during the third quarter, nearly 60 per cent of sales came from prices above $1.25