Archive for October 21st, 2009

Norwegian Corporate Governance Board (NUES) Awards The Prize For The Best Report On Corporate Governance In 2008 Annual Reports to DnB NOR ASA

by Mondo Visione, October 21, 2009.

The Norwegian Corporate Governance Board – NUES (Norsk Utvalg for Eierstyring og Selskapsledelse) – awards a prize every autumn to the company listed on Oslo Børs that the Board wishes to recognise for the quality its report on corporate governance in the previous year’s annual report. The purpose of the prize is to create a greater awareness of corporate governance in general, and to promote the Norwegian Code of Practice for Corporate Governance in particular. NUES also hopes that the award of an annual prize will serve to inspire listed companies that are looking to improve their corporate governance reporting.

NUES is supported in its work on identifying candidates for the prize by the accounting firms Deloitte, Ernst & Young, KPMG, BDO Noraudit and PricewaterhouseCoopers, all of which put forward companies for consideration. On the basis of the input provided by these firms, NUES has evaluated which company should receive this year’s prize. The Board was assisted in its evaluation of this year’s candidates by Finn Berg Jacobsen of BA-HR, and Arthur Sletteberg of Ferd AS.

In awarding the prize, the Board has paid particular attention to the following factors:

  1. How well the board of directors has complied with the Norwegian Code of Practice for Corporate Governance which states at Section 1 that: “The board of directors must provide a report on the company’s corporate governance in the annual report. The report must cover every section of the Code of Practice. If the company does not fully comply with this Code of Practice, this must be explained in the report.”

  2. The extent to which the overall presentation of the report helps shareholders and other parties to evaluate the company’s compliance with the principles of good corporate governance…(continue reading)

Corporate Governance Accreditation

by Umakanth V., for Indian Corporate Law, October 21, 2009.

In Singapore, there is a proposal for listed companies to seek voluntary accreditation of their corporate governance processes and framework from an independent body. This is akin to the ISO certification process. As this report suggests, while such accreditation will better inform retail investors regarding corporate governance practices followed in a company, this could also be riddled with difficulties. For example:

Management time and accreditation costs are just two of the key issues.

Another is how effective the body will be in raising corporate governance standards.

Blue chips already have much higher levels of corporate governance than smaller companies. It is possible that having an accreditation body will just reinforce that divide – blue chips get the certification easily while the ones which do need to pull up their socks sit back and do nothing.

Another concern is that investors will start relying on the certification and be lulled into complacency and fail to do their homework.

All it takes is for one bad egg to appear and investors will complain that the accreditation process is a failure…(complete article)

ASIC in legal swoop on former Centro Property Group leaders

by John Durie, for The Australian Business, Ocotber 21, 2009.

The Australian Securities and Investment Commission has finally taken action against some of the chief architects of the Australian market collapse, with unprecedented legal action against former senior executives and former board members as well as incumbent board members of the struggling Centro Properties Group.

The action by ASIC is one of the most comprehensive crack downs on a major Australian company in history and its target is one of the worst managed with the worst corporate governance standards in history. Some investors will also wonder what action will be taken against the company’s auditors, PricewaterhouseCoopers (PWC).

While ASIC has yet to win its case in court, the legal action puts corporate Australia on notice that the law may take its sweet time to get into gear but ASIC boss Tony D’Aloisio is doggedly keen to hold wrongdoers to task.

Such was Centro’s contempt for shareholders that in 2007 it paid bonuses to executives for the year before it had even finished, misstated its accounts and its structure was so complex that it took the banks months to work out who was owed what.

Each of its assets was geared separately with links back to other assets…(continue reading)

Combining More Effective Banking Regulation with Market Discipline

by Sheila C. Bair, for The Harvard Law School Forum at Harvard Law School, October 21, 2009.

(Editor’s Note: The post below by Commissioner Sheila Bair is a transcript of her remarks to the International Institute of Finance Annual Meeting in Istanbul earlier this month, omitting introductory and conclusory comments; the complete transcript is available here.)

It’s been a year since we faced down the biggest financial crisis to hit the world economy in modern times. Thanks to extraordinary action by monetary and regulatory authorities, we’re now in a period of relative stability. Credit markets are slowly getting back to normal. Liquidity is improving. Equity markets are staging a comeback.

But this is no time to sit back and relax simply because the worst of the storm appears to be over. Storms and hurricanes like this financial crisis can be very unpredictable. They have a nasty habit of regrouping and coming back with a fury. There’s now an active (and I hope ultimately productive) debate in the United States and around the globe about how to repair the financial system.

It’s truly a global debate. Virtually no economy went untouched by the financial crisis…(continue reading)

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