Underlying profits – useful or misleading?

The use of underlying profit as an indicator of corporate performance risks misleading investors, according to a recent study conducted by Deloitte. The firm surveyed the 2010 annual reports of 100 publicly listed and other large New Zealand companies, finding that in 92% of the filings, the highlighted underlying profit improved the statutory profit result by either increasing the profit figure, turning a loss into a profit, or reducing a loss.Read the rest

EU Green paper – Comply or Explain or Else……..

EU Commissioner Michel Barnier’s Green Paper on Corporate Governance closed for consultation on Friday. The irony of the US declaration that shareholders cannot nominate their own directors coming out on the same day will not be lost on the governance community.… Read the rest

Shareholders can’t hold companies to account say US courts

When market commentators talk about corporate governance they often refer to the “Anglo-American Model” of governance, as opposed to the EU’s stakeholder orientated approach. Friday’s decision by the US courts to reject shareholder “proxy access” should leave observers in no doubt that there’s nothing much “Anglo” about the American approach to governance.… Read the rest

When The Powerful Behave Badly

As shareholders were coming to terms with the implications of last week’s shocking disclosures about phone-hacking at NewsCorp, Simon Caulkin, former management correspondent at the Observer tweeted a thought-provoking observation:

Re Murdochs of the world: “Our only chance of having powerful be good is to have more good become powerful” JPfeffer/HBR ow.ly/4ZM5i

The link is to an article published by Jeffrey Pfeffer a Professor of Organizational Behaviour at the Graduate School of Business, Stanford University at the end of May.… Read the rest

The Making of a Daredevil CEO: Why Stock Options Lead to More Risk Taking

New research from Wharton shows that stock options lead to more risk taking by CEOs.

The research is presented in a new paper, “CEO Compensation and Corporate Risk Taking: Evidence from a Natural Experiment,” by Gormley, David Matsa, a professor at Northwestern University’s Kellogg School of Management, and Todd Milbourn, a professor at Olin Business School at Washington University in St.… Read the rest

UK pay dissatisfaction trends revealed

An analysis by Manifest of voting trends on the remuneration report since its introduction in 2003 has revealed the FTSE 100 companies with the greatest level of shareholder dissatisfaction, on average, over the period.

The list includes some companies where there has been one very large dissenting vote, but the more interesting companies are perhaps those which have shown consistently high levels of dissent (“high” being considered to be 20% or more, double the typical average level).… Read the rest