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- Three former UBS officials to forgo $27 mn in compensation - Dealbook
- Banks ask for clarity on Fair Value Accounting - Reuters
- AIG exec Cassano's statements probed by prosecutors - Bloomberg
- AIG says no 2008 bonus for top execs - Reuters
- Banks may write down $44 bln in fourth quarter - Bloomberg
- 'Bailout' is word of the year - Boston Herald
One big reason our economy is in crisis is because self-serving corporate managements and boards failed to provide sufficient risk controls over their finances. The credit crisis was largely preventable and it just shows the extent of mismanagement in corporate America today.
One of the big reasons why this greed and recklessness is allowed to flourish is that many states enable corporate managers and boards to perpetuate themselves in office, no matter how incompetent they are. Most shareholders can’t fight back effectively.
One of these states is Delaware, which generates about 20 percent of state government revenues, or about $550 million annually, from companies that make the state their legal home. A majority of U.S. public companies incorporate in Delaware and many major business decisions are made in its courts.
Delaware courts, which are justifiably respected and adept at making speedy decisions, are often hamstrung by a pro-management bias that emanates from the Delaware legislature, which regularly passes laws that favor managements over stockholders in an effort to attract more businesses to incorporate in the state.
However, other states, such as North Dakota, offer many more rights to shareholders. It is ludicrous that shareholders, who are the true owners of corporations, do not currently have the legal right to move their company to such a jurisdiction if they so choose.
Continue reading "Shareholders Should Decide Where Companies Incorporate" »
Dylan Ratigan has established himself as a top financial anchor and reporter through his work on CNBC shows such as "On the Money" and "Closing Bell" as well as during his tenure at Bloomberg News, where he served as a Global Managing Editor and host of its "Morning Call" program. He is the anchor and co-creator of CNBC's "Fast Money"and the co-anchor of "The Call" and the 3 p.m. hour of the "Closing Bell."
By Dylan Ratigan
Warren Buffett recently urged us all to follow his lead in buying American stocks during this fear-driven down market, invoking his common sense wisdom of being greedy when others are fearful and being fearful when others are greedy.
While I appreciate and agree with Buffett that it may be a good time to invest in this great country's long-term future, I also think there is a lot the Warren Buffetts of the world can do right now to help ensure a prosperous future.
First, we need to take a realistic view of how we got into the current financial calamity.
Continue reading "Limit Company Size and Encourage Short Selling" »
Nell Minow is the editor of The Corporate Library, an independent research firm specializing in corporate governance.
By Nell Minow
President Obama will come into office with very little time to head off a long-term economic downturn. The recent volatility we have seen shows that the need for better corporate governance has never been clearer or more pressing.
The 21st century’s version of "mutually assured destruction" does not require weapons; it is the global economy, one in which we all are now are inextricably intertwined.
Previous scandals – insider trading, the savings and loan abuses, accounting fraud, market-timing, backdated options, and more – could be compartmentalized, attributed to a few bad guys abusing the system.
But this latest mess is so pervasive and so – apparently – legal that it has called into question the most fundamental notions of trust in Wall Street and in the American economy. The impact of America’s sub-prime loan disaster is felt around the world just as economic crises in other markets affected us.
The new President will have to do a lot more than tweaking some rules and issuing some new lists of best practices and disclosure requirements.
And even a new administration will be limited in how far it can go in reminding corporate boards that good governance is more than simply compliance and check-lists. It is about transparency and accountability, but most of all it is about making sure we have board members who are committed to asking good questions and insisting on good answers.
Continue reading "Agenda for a New President: Improve Corporate Governance" »
