Posts Tagged 'The Huffington Post'

The Corporate Governance Climate in 2015

by Patricia Lenkov for The Huffington Post

In the ever-changing and always dynamic world of corporate governance, it can be challenging to keep up with the trends and developments when not focused on these matters full-time. Post corporate implosions of the past 10 years and the subsequent regulatory changes and demands on continuous improvement and increased transparency in the boardroom have heightened the pace of change for boards everywhere. 2015 will surely continue this trend. Accordingly, here are some of the important issues from the world of corporate governance that should continue to make the news and be the subject of debate and speculation:

Gender Diversity

The topic of gender diversity in the boardroom (or lack thereof) has never been more focused on than at present. According to Catalyst, the U.S. based non-profit, women now hold 19.2% of all seats on S&P 500 boards (Catalyst Census). In Canada, the number is slightly better at 20.8% of seats on the S&P/TSX60 index.

2015 will undoubtedly see more push to increase the number of women board directors. Quotas in countries as varied as Norway, Australia and The United Arab Emirates are having an impact as other countries debate and question their own policies. It is generally surmised that here in the U.S., gender quotas will not materialize. Most believe that there are other ways to “move the needle.” This includes term limits, age limits and other board refreshment approaches (more on this later.) Nevertheless we have definitely moved past the question of whether more women in the boardroom leads to improved results because it has been proven time and again that it does.

Other Types of Diversity

To maximize effectiveness, the composition of a corporate board should reflect its customers, the employees of the company and even other stakeholders such as investors. Consequently, diversity in the boardroom does not start and end with gender. In fact, it is safe to say that diversity in the boardroom, at least here in the U.S., has been a focus of attention for some time. However, the context has historically been ethnic diversity. Read more here.

The São Paulo Stock Exchange Expansion Would Be a Good Move

by Susan Perkins for The Huffington Post

Though the LatAm capital markets are fighting to ward off further downward movement due to stumbling oil prices and weakening currencies, one long-term strategy that will continue to bring more liquidity to these markets is better corporate governance practices.

Considerations of LatAm capital market consolidation have been on the horizon. Most recently, The São Paulo stock exchange — BM&F BOVESPA — announced it may soon acquire significant stakes in the national stock exchanges of Argentina, Colombia, Chile, Mexico, and Peru. In exchange for this ownership stakes, the BM&F BOVESPA executives want to ensure a seat on the boards of each, which could put them in a position to consolidate the regulatory infrastructure and also create standardization for regulatory practices throughout the region. Read more here.

How Good Corporate Governance Can Help Save Middle Eastern Economies in Crisis

By John Sullivan, 30th June 2013, The Huffington Post

Weak corporate governance can be linked to financial collapses, the inability to attract investment, persistent corruption, privatization failures, weak property rights, and many other development challenges faced by countries around the world. These challenges are particularly relevant in the Middle East, where many countries are trying to transition to free-market economies. Corporate governance needs to be a central part of this transition.

Only a decade ago, no agreed-upon phrase for corporate governance existed in Arabic, which made debate and reform difficult. If an issue cannot be clearly defined, it cannot be appropriately addressed. To that end, an effort led by the Arabic Linguists Council, supported by the Center for International Private Enterprise (CIPE), resulted in the first standardized term for “corporate governance” in the Arabic language: hawkamat ash-sharikat. Developing a common term opened the door for broad-based dialogue on corporate governance in the Arab world.

At the core of strong corporate governance is the separation of ownership and control. This is of particular interest in the Middle East, where many companies are family-owned. As the business passes from generation to generation, the governance challenge changes completely. And as it becomes a major corporation or grows further, the governance challenges continue to multiply. If you look at Germany, the United States, and other countries that have put into place family councils and other institutions, the survival rate of family firms increases markedly. Once a group of people, including investors, have bought into the company, they have an interest in the governance of that company – helping establish the essential separation between ownership and control. Continue reading…

The Zero Transparency Policy in Our Financial Reform Process and What it Means for Your Investments

by Lawrence G. McDonald for The Huffington Post, April 11th, 2011.

I recently delivered a keynote speech in New York city focused on valuable risk management and corporate governance lessons, as well as the future of Financial Reform and its impact on the economy, the capital markets and investors.

Over two dozen institutional investors came up to me after the presentation and were shocked at how little transparency there is coming out of Washington on Financial Reform. The questions were; almost three years after Lehman Brothers what’s been accomplished? Do “too big to fail banks” still have the Federal Reserve and US Treasury held hostage? After all of the stimulus, quantitative easing and experimental drugs, would another Lehman Brothers bankrupt America?

In the last several weeks, I’ve met with two US Senators and two US Congressmen and I don’t like what I’m hearing. These 4 members of Congress are all very high ranking members of the House Financial Services Committee and the Senate Banking Committee. Here’s my color on what’s really happening. (continue reading… )

 

Future Proofing the Boardroom: Today’s Agendas

by Lucy P. Marcus for The Huffignton Post, February 18th, 2011.

The board room agenda is going through a reformation. To ensure that we are helping organizations future proof themselves, what are some of the essential things that boards and board members need to think about, no matter the size, location, or sector of their organization? Five areas need an update in the way we as board members think about them: infrastructure, technology, internationalization, communication, and balancing continuity and change.

Infrastructure
Boards must embrace the political, economic, and social reality of the way the world is operating today and tomorrow. One of the areas that needs a real rethink is building organizations that can operate effectively in a low-carbon economy. The main issues here are about energy consumption, integrating clean tech and sustainability, and they apply to all facets of the business: from facilities, to building stock and rolling stock, from changing work patterns and practices to the ways in which companies engage with their stakeholders and the local communities where they are based. It touches everything an organization does, how it behaves, how it invests, and it means board members need to be asking the questions about how these decisions will impact the business five and ten years down the road. Most importantly, it isn’t about green washing or perception; it is fundamentally about how the organization does business. (continue reading… )

 

Beyond Optics: Why Board Diversity Really Matters

by Lucy P. Marcus for The Huffington Post, January 4th, 2011.

Discussions around diversity in the board room often focus on gender, and indeed women are severely under-represented on boards. Importantly, though, the lack of women on boards is a reflection of a wider problem: it is one of color, age, international perspective, and more.

A lack of diversity is not simply a problem of “optics”. It looks skewed not to have a diverse board, but just because in the modern world it looks odd, does it make a difference in real economic terms? Does it actually affect the bottom line? To my mind the answer is a resounding yes. We do not need diversity for diversity’s sake, but because board diversity contributes to the profitability of the business.

There is a fundamental economic reason why diversity is important: diversity of thought, experience, knowledge, understanding, perspective and age means that a board is more capable of seeing and understand risks and coming up with robust solutions to address them. Businesses led by diverse boards that reflect the whole breadth of their stakeholders and their business environment will be more successful. They are more in touch with their customers’ demands, their investors’ expectations, their staff’s concerns, and they have a forum inside the board room where these different perspectives come together and successful future proofing business strategies can be devised.

An argument I have heard against actively seeking diversity on the board is a fear that too much diversity and independence of thought can be damaging to the cohesion of the board. Yet, for healthy boards with capable chairs the very opposite is true. Board cohesion is vital, and everyone needs to be moving in the same direction, but within that agreed direction, the modern board requires open, constructive, and dynamic discussion, rooted in respect and regard for the people around the table. (continue reading… )

The Role of Non-Executive Board Directors Today

by Lucy P. Marcus for The Huffington Post, December 20th, 2010.

As a non-executive board director, I have been thinking a great deal about what it means to do this role in today’s environment.

We exist in a dramatically different economic climate. With that comes increased scrutiny by stakeholders and governments alike, and with good reason. If our companies are the engine for bringing us out of the doldrums, then we need to have the best foundations and tools for them to do just that.

The nature of what it takes to be a responsible board member anywhere in the world has changed. Simply looking over the shoulder of the executive team and offering an occasional word of wisdom or direction is not sufficient. Non-executive board directors today need to be proactive in their approach to ensure that the organizations they serve do not simply survive but thrive. And nothing less should be demanded of them than that.

The best organizations of all sizes, in both the for-profit and not-for profit sectors, are looking for active, engaged, and independent board members, and they encourage a climate in which having those people on the board can bear fruit. These board rooms are environments in which board members are comfortable, and indeed required, to ask hard questions, challenge the status quo, and step up to assist in areas where they can. (continue reading… )

 


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