During my investment career I have always been perplexed by the make-up of most firm’s Board of Directors, from my coverage of U.S. stocks to global Stocks, from small cap to mega cap companies, from the buy side to the sell side. I have seen it all, and I have almost universally been disappointed. I have seen a medical doctor sit on the board of one the largest railroads in the U.S., management from top customers sitting on compensation committees, and active Fortune 100 CEO’s that also held three board of director positions. But like most investors, I have just noted the poor board make-up, and included it in the mosaic of information I use to make investment decision, because in reality most board memberships are poorly filled and there was little as investor I could do about it. Unfortunately, I did not think about it much, I did not ask why boards were so poorly filled.
“There never is a good time for tough decisions. There will always be an election or something else. You have to pick courage and do it. Governance is about taking tough, even unpopular, decisions.” ; Jairam Ramesh
In common with our first survey (Conducted June 2015), this survey has its origins in the research for a book that we (Anil Kariwala, Robert Purse & Graham Smedley) are currently writing. Rather than simply relying upon anecdotal evidence and personal experience, we decided to undertake some survey-based research and hence the survey, which was open for responses during the first half of July 2015. The survey was intended to provide us with an understanding of people’s general perceptions of Corporate Governance and how it is applied, or should be applied, to their organisation. A number of the survey questions were rather more forensic than in our first survey.
This survey has its origins in a book that we (Anil Kariwala, Robert Purse & Graham Smedley) are currently writing. Rather than simply relying upon anecdotal evidence and personal experience, we decided to undertake some survey-based research and hence the survey, which was open for responses during the first half of June 2015. The survey was intended to provide us with an understanding of people’s general perceptions of Corporate Governance and how it is applied in their organisation. The survey questions were quite deliberately ‘broad-brush’ in nature and we will shortly be launching a more forensic, but still short, survey.
1. LIFESTYLE AUDITS CURB ERRANT BEHAVIOUR
Article by Terrance M. Booysen and reviewed by Megan Grindell (Director: Carter DGF Risk Management)
In today’s heightened times of public scrutiny and calls for ethical leaders, it’s not surprising that many concerned citizens have become far more demanding for good governance and transparency. Social media has been a major contributor to this call, such that a person’s privacy — including matters such as their social pleasures and behaviour — are broadcasted in seconds to almost any corner of the world. For example, if a work colleague is an avid user of Facebook or Twitter, it’s not too difficult finding out what that person’s likes and dislikes are, what gyms or sport clubs they attend and how often, right down to discovering their dream car or accommodation. Read more…
People want to do business with people they trust. The 2008 financial crisis left the industry with a black eye, and for good reason. Unfortunately, not much has changed in the past eight years as most financial services firms continue to place short-term profits ahead of long-term customer needs. Individual investors have valid reasons to be wary of financial advisors, but there is good news. It’s easier than advisors might think to build trust with existing and potential clients. While in any relationship, trust takes time and is built in incremental steps, the following are 10 questions you should be prepared to answer should they arise: