How can Mr. Harper even attempt such an endeavour when:
The proliferation and scope of the corporation have now reached mammoth proportions, there are over 40, 000 corporations in the world, and two hundred giant corporations now control over a quarter of the world’s economic activity. Philip Morris, an American corporation which operates in 171 countries has annual revenues larger than that of New Zealand’s economy. Of the 100 largest economies, in the world, 51 are corporations, only 49 are countries. Corporations are calling the shots and in fact actively formulating policy.
Today, the public corporation itself operates as a form of representative government. In the olden days ‘the church’ called the shots today ‘BIG BUSINESS’ have taken over the power that was once held by ‘DEMOCRATIC GOVERNMENTS’. We have a government in power who stated that they plan, “to go after gas companies with price fixing legislation that would make it easier to prove collusion”
(http://news.sympatico.msn.ctv.ca/Home/ContentPosting?newsitemid=CTVNews%2f20080924%2felection2008_economy_worries_080925&feedname=CTV-TOPSTORIES_V3&show=False&number=0&showbyline=True&subtitle=&detect=&abc=abc&date=TrueHarper wants to crack down on gas-price fixing).
Is it not clear that we as consumers have been and are being gouged by these oil companies?
Continuing in this same article, “Tories say they will widen the price-fixing provisions in the Competition Act and almost triple the maximum penalties to 14 years in prison and a $25-million fine”. Certainly we can count on never witnessing One Company being fined in our lifetime.
The revenue collected by our ‘DEMOCRATIC CANADIAN GOVERNMENT’ is filling the coffers, why would they enforce ‘provisions in the Competition Act’; to reduce the revenue they are collecting from these oil sands, oil and gas, and pipeline companies?
So what part does Corporate Governance play in this scenario?
We are all stakeholders in our communities, some of us are shareholders in these organizations. Shareholders are the owners of the corporation who are imbued with the authority to elect directors to represent their interests and govern the corporation. We need to address this situation that has gone corrupt, distorted, and awry. We can exercise our votes either through our voting power or through reducing our demand. Please read my article
(http://www.advaitaashrama.org/pb_archive/2006/PB_2006_September.pdf)
for some solutions to this crisis in our global society.
Friday, September 26, 2008
Wednesday, August 20, 2008
New Journal Article a must read on Shell Canada
Dr. Rookmin Maharaj
Shell Canada: Over a Decade of
Sustainable Development Reporting Experience
Abstract
Purpose: This paper investigates what motivated Shell Canada, a subsidiary of Royal Dutch Shell, to be one of the first companies in the world to report its environmental initiatives in 1991. It explores how Shell Canada driven by a set of core values and business principles, continues to make strides in the quality of its sustainability reporting and communication.
Design/methodology/approach: Shell historical reports and documents were reviewed and interview data gathered from company personnel.
Findings: Shell Canada has gained a reputation for striving toward stakeholder engagement and transparency in its reporting as well as through its actions.
Practical Implications: This paper offers advice to other companies as to how to improve their corporate communications regarding their environmental and sustainability performance.
Originality/value: This paper demonstrates Shell Canada’s efforts to initiate transparent sustainable development reporting and stakeholder engagement, two areas in which other companies can learn from Shell Canada.
Keywords: core values; sustainability reporting; triple bottom line; stakeholder engagement; transparency; Shell Canada
Full paper may be accessed at:
http://www.emeraldinsight.com/Insight/viewContentItem.do;jsessionid=228510D11AF7ED27A9029640C28B8D0B?contentType=Article&contentId=1729339
Shell Canada: Over a Decade of
Sustainable Development Reporting Experience
Abstract
Purpose: This paper investigates what motivated Shell Canada, a subsidiary of Royal Dutch Shell, to be one of the first companies in the world to report its environmental initiatives in 1991. It explores how Shell Canada driven by a set of core values and business principles, continues to make strides in the quality of its sustainability reporting and communication.
Design/methodology/approach: Shell historical reports and documents were reviewed and interview data gathered from company personnel.
Findings: Shell Canada has gained a reputation for striving toward stakeholder engagement and transparency in its reporting as well as through its actions.
Practical Implications: This paper offers advice to other companies as to how to improve their corporate communications regarding their environmental and sustainability performance.
Originality/value: This paper demonstrates Shell Canada’s efforts to initiate transparent sustainable development reporting and stakeholder engagement, two areas in which other companies can learn from Shell Canada.
Keywords: core values; sustainability reporting; triple bottom line; stakeholder engagement; transparency; Shell Canada
Full paper may be accessed at:
http://www.emeraldinsight.com/Insight/viewContentItem.do;jsessionid=228510D11AF7ED27A9029640C28B8D0B?contentType=Article&contentId=1729339
Sunday, July 6, 2008
Dr. Rookmin Maharaj; Corporate Governance Model; Toronto-Dominion Bank (TSX:TD) disclosed Friday a $96-million loss caused by "incorrectly priced"
…………………..AND LIFE GOES ON…………………………….
"It's got to be disappointing for management at TD because they have prided themselves on having not had these issues, where many of their peers have had absolutely devastating related issues," said Brad Smith of Blackmont Capital. TD Bank has spent the last year gliding relatively unscathed through a period where its Canadian peers have been slammed with massive writedowns related to credit losses tied to the U.S. subprime mortgage market....................... The bank's announcement echoed similar risk management troubles faced by the Bank of Montreal (TSX:BMO) early last year when it reported $680 million of commodities-trading losses, mostly from natural gas trading. TORONTO - Toronto-Dominion Bank (TSX:TD) disclosed Friday a $96-million loss caused by "incorrectly priced" financial investments at its operations in London. Canada's second-biggest bank by assets said the employee involved at its TD Securities arm "is no longer with the company" and the Toronto bank is co-operating with Canadian and British regulators investigating the matter.( http://finance.sympatico.msn.ca/investing/news/businessnews/article.aspx?cp-documentid=8438736TD).
Where were the directors?
Who are these so called FINANCIAL ANALYSTS?
For solutions to these ONGOING, NEVER ENDING, GOVERNANCE OVERSIGHT (USED IN THE NEGATIVE SENSE, I.E. OMISSION; FAILURE TO NOTICE). PLEASE READ OTHER ARTICLES ON MY BLOG
It is argued that a combination of legislation, regulation, effective risk management and appropriate sanctions are needed, if such unethical behaviour, and resulting corporate failure, is to be prevented in future. However, what is required is an astute, independent, assessment of these financial collapse debacles. This may establish that failures within these companies' corporate cultures and management systems allow, if not encourage, unethical behaviour by key individuals. COULD IT BE THAT THE CONTINUATION OF THE OLD BOYS CLUB may be the fundamental reason for the blatant disregard and perception of invincibility/groupthink mentality of same. COULD IT BE THAT ONCE AN EMPLOYEE IS INCREASING THE PROFITS AND BOTTOM LINE OF AN ORGANIZATION HE/SHE IS SHELTERED BY TOP EXECUTIVES, WHO MAY TURN A BLIND EYE TO UNETHICAL PRACTICES?Dr. Rookmin Maharaj’s research on:Corporate Governance and the Board of Directors:Study of the Importance of the Role of the Formal & Informal SystemsInvestigates corporate governance issues from a behavioural viewpoint. It makes a distinction between strict adherence to formal rules and regulations: CEO/Chair separation, independence of board members and board size and informal characteristics of board members: knowledge, values, and groupthink.There are three main conclusions from her research and corporate experience:1. Clearly proves that formal rules and regulations are inadequate; they have little effect upon decision making by board members. Informal characteristics must be considered in unison with the formal system when nominating board members, management and employees in order to restore shareholder confidence and to rebuild trust in corporate governance.2. Similar values and groupthink can contribute positively to corporate decision making. However, there is a high possibility for groupthink and values to become redundant, masking board members’ and managements’ knowledge thus affecting their decision making process.3. Skills matrices that include questions related to values, knowledge and groupthink should be considered by corporations to ensure the nomination of well-rounded members, management and employees.Changes to board process, and board decision making, are seminal in preventing future Enron and WorldCom fiascoes. It is only by changing the behaviours of the board of directors, through adopting skills matrices, that sweeping changes can occur. In the past boards have asked: who are our board members? However, the most important question a board can ask today is: how can the skills and knowledge of our board members be used in service of the strategic direction of the corporation? This can be achieved by recruiting new board members, management and employees who fill the needs of an organization, in contrast to nominating ‘friends’ and continuing the tradition of the old boys club.Dr. Maharaj argues that, and has tangible evidence, that what should be done is a forensic audit on 'the people that we hire' and 'employees, managers, board members' should also conduct an audit on their potential employers. What is your opinion?Does your opinion change with this update?
"It's got to be disappointing for management at TD because they have prided themselves on having not had these issues, where many of their peers have had absolutely devastating related issues," said Brad Smith of Blackmont Capital. TD Bank has spent the last year gliding relatively unscathed through a period where its Canadian peers have been slammed with massive writedowns related to credit losses tied to the U.S. subprime mortgage market....................... The bank's announcement echoed similar risk management troubles faced by the Bank of Montreal (TSX:BMO) early last year when it reported $680 million of commodities-trading losses, mostly from natural gas trading. TORONTO - Toronto-Dominion Bank (TSX:TD) disclosed Friday a $96-million loss caused by "incorrectly priced" financial investments at its operations in London. Canada's second-biggest bank by assets said the employee involved at its TD Securities arm "is no longer with the company" and the Toronto bank is co-operating with Canadian and British regulators investigating the matter.( http://finance.sympatico.msn.ca/investing/news/businessnews/article.aspx?cp-documentid=8438736TD).
Where were the directors?
Who are these so called FINANCIAL ANALYSTS?
For solutions to these ONGOING, NEVER ENDING, GOVERNANCE OVERSIGHT (USED IN THE NEGATIVE SENSE, I.E. OMISSION; FAILURE TO NOTICE). PLEASE READ OTHER ARTICLES ON MY BLOG
It is argued that a combination of legislation, regulation, effective risk management and appropriate sanctions are needed, if such unethical behaviour, and resulting corporate failure, is to be prevented in future. However, what is required is an astute, independent, assessment of these financial collapse debacles. This may establish that failures within these companies' corporate cultures and management systems allow, if not encourage, unethical behaviour by key individuals. COULD IT BE THAT THE CONTINUATION OF THE OLD BOYS CLUB may be the fundamental reason for the blatant disregard and perception of invincibility/groupthink mentality of same. COULD IT BE THAT ONCE AN EMPLOYEE IS INCREASING THE PROFITS AND BOTTOM LINE OF AN ORGANIZATION HE/SHE IS SHELTERED BY TOP EXECUTIVES, WHO MAY TURN A BLIND EYE TO UNETHICAL PRACTICES?Dr. Rookmin Maharaj’s research on:Corporate Governance and the Board of Directors:Study of the Importance of the Role of the Formal & Informal SystemsInvestigates corporate governance issues from a behavioural viewpoint. It makes a distinction between strict adherence to formal rules and regulations: CEO/Chair separation, independence of board members and board size and informal characteristics of board members: knowledge, values, and groupthink.There are three main conclusions from her research and corporate experience:1. Clearly proves that formal rules and regulations are inadequate; they have little effect upon decision making by board members. Informal characteristics must be considered in unison with the formal system when nominating board members, management and employees in order to restore shareholder confidence and to rebuild trust in corporate governance.2. Similar values and groupthink can contribute positively to corporate decision making. However, there is a high possibility for groupthink and values to become redundant, masking board members’ and managements’ knowledge thus affecting their decision making process.3. Skills matrices that include questions related to values, knowledge and groupthink should be considered by corporations to ensure the nomination of well-rounded members, management and employees.Changes to board process, and board decision making, are seminal in preventing future Enron and WorldCom fiascoes. It is only by changing the behaviours of the board of directors, through adopting skills matrices, that sweeping changes can occur. In the past boards have asked: who are our board members? However, the most important question a board can ask today is: how can the skills and knowledge of our board members be used in service of the strategic direction of the corporation? This can be achieved by recruiting new board members, management and employees who fill the needs of an organization, in contrast to nominating ‘friends’ and continuing the tradition of the old boys club.Dr. Maharaj argues that, and has tangible evidence, that what should be done is a forensic audit on 'the people that we hire' and 'employees, managers, board members' should also conduct an audit on their potential employers. What is your opinion?Does your opinion change with this update?
Friday, July 4, 2008
ILLEGAL GUNS ENTER CANADA FROM THE UNITED STATES OF AMERICA!!!!
Canada is in dire need of effective leadership and Corporate Governance with regards to gun control. Perhaps we should take advice from Toronto Mayor David Miller who wants Ottawa to exert diplomatic pressure on Washington. As Mayor Miller noted if there is lack of control regarding guns in the US, THE PROBLEM will filter through Canada via loopholes like “blue-steel highway right up the U.S. from places where it's easy to get guns to the northeast U.S. and to Canada. Mayor Miller is correct in stating that Canada should make it a national security issue. As Mayor Miller noted there is a direct correlation between the weak U.S. gun laws and people dying on the streets of Canada." This seems a simple deduction and as citizens one would expect the Canadian Government to take a stand and stop dragging their feet with regard to instituting regulations AND ENFORCING THESE REGULATIONS! According to Yahoo news reporter “Public Safety Minister Stockwell Day noted that “any regulation that comes up for review, especially one that's been on the books but never implemented for a number of years, is always addressed to make sure it's current," Day says. If we were current why was a second time offender (according to Yahoo news) “Curtis Coleman caught red-handed smuggling a shipment of guns into Canada from the U.S. again?” Perhaps the slap on the wrist is not enough to curtail this sort of behavior in Canada.
“Mounties found them with backpacks carrying three dozen guns, including two machine pistols, 24 diamonds and US$100,000 cash. Coleman was convicted of smuggling and possessing prohibited or restricted firearms and deported after serving most of a two-year sentence. This time he pleaded guilty to a single count of being in a vehicle with the contraband guns. The judge condemned him for his role in trafficking guns that put the Canadian public at risk and he drew 36 months, less time served awaiting trial” (http://ca.news.yahoo.com/s/capress/080703/national/gun_smugglingThu Jul 3, 3:31 PM). How many lives need to be lost before ANY OR ALL OF the enforcement AGENCIES; THE JUDICAL SYSTEM AND THE Canadian Government, ACTUALLY TAKE A STAND!!!
“Mounties found them with backpacks carrying three dozen guns, including two machine pistols, 24 diamonds and US$100,000 cash. Coleman was convicted of smuggling and possessing prohibited or restricted firearms and deported after serving most of a two-year sentence. This time he pleaded guilty to a single count of being in a vehicle with the contraband guns. The judge condemned him for his role in trafficking guns that put the Canadian public at risk and he drew 36 months, less time served awaiting trial” (http://ca.news.yahoo.com/s/capress/080703/national/gun_smugglingThu Jul 3, 3:31 PM). How many lives need to be lost before ANY OR ALL OF the enforcement AGENCIES; THE JUDICAL SYSTEM AND THE Canadian Government, ACTUALLY TAKE A STAND!!!
Friday, May 9, 2008
WAKE UP AND SMELL THE COFFEE!!!!!!!!!!!!!!!!Tim Hortons
WAKE UP AND SMELL THE COFFEE!!!!!!!!!!!!!!!!
Tim Hortons - just the beginning of this sort of behaviour in Canada where manager (s) are acting a bit overzealously (http://www%20.theglobe%20and%20mail/. com/servlet/ story/RTGAM. 20080507 .wt im bit0507/ CommentStory /National/home/). Perhaps there may be another side to this story, the managers side, however,
Universities, Superstore, Canadian Tire, the police force the Energy Sector are just a few sectors that are bringing foreign workers into Canada without thought about the ramifications of bringing workers (executive staff or lower rank employees) without the proper orientation into Canadian culture.
'So called' Canadian companies are now hiring (in an uncontrollable manner) mangers and senior staff from the United States.
(Calgary has 10% UK bobbys- “But now that expat officers account for roughly 10 per cent of Calgary's police service, forces in the provinces want to slow down foreign recruiting programs and instead redouble efforts to find more home-grown…………..”talent(http://www.thesudburystar/ .com/ Article Display .aspx?e=974170Alberta flooded with bobbys; Calgary, Edmonton look to England to solve police shortage)
PLEASE NOTE CEOs, BOARD MEMEBERS AND MEMBERS OF THE EXECUTIVE, THAT OUR CULTURE IS DIFFERENT FROM THAT OF THE US, UK for example. PLEASE TRAIN, EDUCATE AND TAKE THE TIME TO RECRUIT WITH CARE.
Please remember that good governance can prevent ‘value’ destruction.
Dr. Rookmin Maharaj research integrates the disciplines of Political Science, Education, and Business in the area of corporate governance/Sarbanes Oxley (SOX). Dr. Maharaj has developed a unique model that can be used as a compass by corporations, educational, healthcare, and political institutions to build better boards, management and employees. Her method improves and increases the bottom line/profits of organizations. She is currently consulting with companies in Alberta, Canada on Corporate Governance. She has worked in the energy sector in Alberta Canada for over fifteen years. She has a master’s degree in Higher Education and has taught in France, the Caribbean and in Canada at the University of Calgary and Mount Royal College on Environmental Management and Business.
Visit Dr. Maharaj blog and read her research papers to review a tested Corporate Governance Model that reduces the risk of losing ‘organizational reputation.’ Contact Dr. Maharaj for advice on hiring the ‘right’ employees for the ‘right’ positions
http://corporategovernanceconcerns.blogspot.com/
Tim Hortons - just the beginning of this sort of behaviour in Canada where manager (s) are acting a bit overzealously (http://www%20.theglobe%20and%20mail/. com/servlet/ story/RTGAM. 20080507 .wt im bit0507/ CommentStory /National/home/). Perhaps there may be another side to this story, the managers side, however,
Universities, Superstore, Canadian Tire, the police force the Energy Sector are just a few sectors that are bringing foreign workers into Canada without thought about the ramifications of bringing workers (executive staff or lower rank employees) without the proper orientation into Canadian culture.
'So called' Canadian companies are now hiring (in an uncontrollable manner) mangers and senior staff from the United States.
(Calgary has 10% UK bobbys- “But now that expat officers account for roughly 10 per cent of Calgary's police service, forces in the provinces want to slow down foreign recruiting programs and instead redouble efforts to find more home-grown…………..”talent(http://www.thesudburystar/ .com/ Article Display .aspx?e=974170Alberta flooded with bobbys; Calgary, Edmonton look to England to solve police shortage)
PLEASE NOTE CEOs, BOARD MEMEBERS AND MEMBERS OF THE EXECUTIVE, THAT OUR CULTURE IS DIFFERENT FROM THAT OF THE US, UK for example. PLEASE TRAIN, EDUCATE AND TAKE THE TIME TO RECRUIT WITH CARE.
Please remember that good governance can prevent ‘value’ destruction.
Dr. Rookmin Maharaj research integrates the disciplines of Political Science, Education, and Business in the area of corporate governance/Sarbanes Oxley (SOX). Dr. Maharaj has developed a unique model that can be used as a compass by corporations, educational, healthcare, and political institutions to build better boards, management and employees. Her method improves and increases the bottom line/profits of organizations. She is currently consulting with companies in Alberta, Canada on Corporate Governance. She has worked in the energy sector in Alberta Canada for over fifteen years. She has a master’s degree in Higher Education and has taught in France, the Caribbean and in Canada at the University of Calgary and Mount Royal College on Environmental Management and Business.
Visit Dr. Maharaj blog and read her research papers to review a tested Corporate Governance Model that reduces the risk of losing ‘organizational reputation.’ Contact Dr. Maharaj for advice on hiring the ‘right’ employees for the ‘right’ positions
http://corporategovernanceconcerns.blogspot.com/
Tuesday, April 22, 2008
Asset-Backed Commercial Paper (ABCP) FIASCO
The news media are rampant with news and unwanted/sarcastic advice about the ABCP fiasco, for example, Ms. Deirdre Mcmurdy IN HER ARTICLE:
http://finance.sympatico.msn.ca/investing/deirdremcmurdy/article.aspx?cp-documentid=6671588A $34 billion made-in-Canada mess
Stated:
“There are plenty of lessons for investors and for the investment industry from a made-in-Canada credit crisis. No one ever wants to take responsibility when things go wrong. Blaming someone else for your bad decision is Human Nature 101. But in this case, that reality pretty much guarantees that the individual ABCP investors learn yet another painful lesson from this experience: Main Street and Bay Street almost never intersect. Ms. Mcmurdy goes on to state that allowing these people “so much clout - this is, after all, a $34-billion mess - in the hands of people who are angry, inexperienced and, in the grander scheme of things, relatively small players….They feel their losses entitle them to special treatment. …… For investors, the lessons are basic ones: risk is as closely tied to reward as fear is to greed; you should always question your financial advisor closely and ask for explanations until you really do understand the product and its provenance; you should make sure your advisor understands your risk threshold and investment horizon instead of assuming anything; regularly review your portfolio statements and follow-up on items you don't understand; if your gut tells you an advisor or an investment is wrong for you - listen to it; if you think you want a piece of the "real action" and can handle products that have traditionally been reserved for the pros - like ABCP - be prepared to get bruised".....
To actually compare a 34 billion dollar fiasco to the sale of a washing machine says it all about the Ms Mcmurdy’s disrespect for these small investors as she continues in her article to state,
“But then, that happens to consumers all the time. Is a mutual fund really that different from a washing machine? We all buy things we need, even if we're not sure how they actually work. We then trust that warranty or the vendor, will help us out if it ceases to work in short order.”
Ms Mcmurdy goes on to reprimand the small investors by insulting their intelligence stating that it was
“Somewhat surprisingly, the 1,800 small investors who own the paper have been given equal voice and vote with the bigger fish like pensions funds and corporations. And that gives them some rare leverage in terms of upsetting the whole wobbling apple cart”.
Has Ms Mcmurdy ever heard about 1 share, 1 vote?
Is this the advice and the opinion of a “columnist for the National Post, Canadian Business magazine MSN Money and co-anchor of MoneyWise”??
So what are some solutions to the ABCP Credit Squeeze?
We need to investigate who are these financial advisors Ms. Mcmurdy is referring?
What are their qualifications?
These advisors in many instances are only concerned with their bonuses, salaries and commissions. For example, In HSBC's statement of defence HSBC stated that Aastra would not have cared even if it knew that the ABCP it bought was backed by complicated derivatives such as credit default swaps and collateralized debt obligations. Aastra was interested only in the credit rating on the notes and the yield (http://www.financialpost.com/creditcrunch/Story.html?id=275411).
This is a prime example of governance at its worse and it starts at the top.
Who are the directors?
What are the directors doing to help these investors?
How many boards do they sit on?
Do they have the time to know what is actually going on with investors’ paltry $ 34 billion, and do they care????
Do they have the knowledge of what an ABCP is?
Do they care?
How many actually reside in Canada?
What decision – making process did they go through to formulate these ABCPs?
Or do they know that ABCP’S exist at the companies on which they sit as board members. Please note some of these directors have JOB SECURITY FOR THE NEXT TWENTY YEARS(below)!!!!!!!!!!!!!!!
What is management doing?
If an asset-backed commercial paper (ABCP) program is composed of a bankruptcy-remote special purpose vehicle (SPV), or conduit, that issues commercial paper (CP) and uses the proceeds of such issuance primarily to obtain interests in various types of assets, either through asset purchase or secured lending transactions. And if an ABCP program includes key parties that perform various services for the conduit, credit enhancement that provides loss protection, and liquidity facilities that assist in the timely repayment of CP. Then it is prudent that an ABCP seem to be fully protected or bonded, contrary to Ms Mcmurdy’s scornful remarks to investors.
(http://pages.stern.nyu.edu/~igiddy/ABS/fitchabcp.pdf).
In this instance some of the “key parties” include, HSBC Securities Canada; Canaccord Capital Corp.; Scotia Capital Inc., and Scotia Capitaux Inc., National Bank of Canada . who were supposed “to provide the liquidity needed in the first place to roll over the paper”.
Read my article for solutions:
Critiquing and contrasting “moral” stakeholder theory and “strategic” stakeholder: implications for the board of directors
Findings – “Value” for shareholder and stakeholder may not be mutually exclusive in some instances. MST may hold the key to giving the board a more useful, comprehensive framework of the firm's utility and purpose to society.
Practical implications – Organizations may be selected on their ethical performance by investors. Depending on whether ethical criteria are included in the definition of “firm's value”, decisions about which stakeholder theory to use become an issue of strategic importance to all organizations.
Originality/value – The paper illustrates how the board of directors as the governing body of the organisation may find that continuous assessment of the company's stakeholders is valuable in reducing risks.
http://www.emeraldinsight.com/Insight/viewContainer.do;jsessionid=AFFFA9B264B7619EFFD296FC452108FB?containerType=Issue&containerId=6012734 Critiquing and contrasting “moral” stakeholder theory and “strategic” stakeholder: implications for the board of directors
Dr. Rookmin Maharaj (pp. 115-127) Keywords: Boards of directors, Decision making, Market value, Stakeholder analysis
Please take a look at the board members for some of these companies (HSBC Securities Canada; Canaccord Capital Corp.; Scotia Capital Inc., and Scotia Capitaux Inc., National Bank of Canada).
The role of the board of directors is a complex and challenging task that is weighed down with conceptual, methodological and practical difficulties. Corporate governance has become progressively more important in the business world and has become inextricably linked to the process of decision-making within corporations.
The BOD being the top level of any corporation is therefore, the body whose responsibility it is to rigorously examine and advise management about high risk and the adverse affects of packaging and reselling debt such as these asset-backed commercial papers.
The institutions that packed and re-sold the debt as a savings product - principally Scotiabank and Canaccord Capital - should UPHOLD their responsibilities, HONOUR THE TRUST; ACT IN A FIDUCIARYCAPACITY TO INVESTORS, and HONOUR the reputation of THEIR RESPECTIVE firms.
Dr Maharaj’s Corporate Governance Decision-Making model indicates that tools (Skills Matrices, Evaluations and Interconnections) and variables (Knowledge, Groupthink, and Values) have positive relationships with Decision-making. These findings have important implications for board formulation and corporate governance in the future AND MAY REDUCE THE PROBABILITY OF fiascoes like ABCP happening in the future.
Read my article:
http://www.palgrave-journals.com/ jdg/ journal/v5/n1 /abs /2050074a.html
Dr. Rookmin Maharaj has developed a unique and revolutionary model that can identify the characteristics requisite for effective Corporate Governance within an organization that strikes the ideal balance between the formal and informal rules and regulations. Dr. Maharaj has researched with the top oil and gas, mining, chemical, and pipeline companies in North America. She continues to transform ideas into actions, ultimately increasing the bottom line for organizations.
http://finance.sympatico.msn.ca/investing/deirdremcmurdy/article.aspx?cp-documentid=6671588A $34 billion made-in-Canada mess
Stated:
“There are plenty of lessons for investors and for the investment industry from a made-in-Canada credit crisis. No one ever wants to take responsibility when things go wrong. Blaming someone else for your bad decision is Human Nature 101. But in this case, that reality pretty much guarantees that the individual ABCP investors learn yet another painful lesson from this experience: Main Street and Bay Street almost never intersect. Ms. Mcmurdy goes on to state that allowing these people “so much clout - this is, after all, a $34-billion mess - in the hands of people who are angry, inexperienced and, in the grander scheme of things, relatively small players….They feel their losses entitle them to special treatment. …… For investors, the lessons are basic ones: risk is as closely tied to reward as fear is to greed; you should always question your financial advisor closely and ask for explanations until you really do understand the product and its provenance; you should make sure your advisor understands your risk threshold and investment horizon instead of assuming anything; regularly review your portfolio statements and follow-up on items you don't understand; if your gut tells you an advisor or an investment is wrong for you - listen to it; if you think you want a piece of the "real action" and can handle products that have traditionally been reserved for the pros - like ABCP - be prepared to get bruised".....
To actually compare a 34 billion dollar fiasco to the sale of a washing machine says it all about the Ms Mcmurdy’s disrespect for these small investors as she continues in her article to state,
“But then, that happens to consumers all the time. Is a mutual fund really that different from a washing machine? We all buy things we need, even if we're not sure how they actually work. We then trust that warranty or the vendor, will help us out if it ceases to work in short order.”
Ms Mcmurdy goes on to reprimand the small investors by insulting their intelligence stating that it was
“Somewhat surprisingly, the 1,800 small investors who own the paper have been given equal voice and vote with the bigger fish like pensions funds and corporations. And that gives them some rare leverage in terms of upsetting the whole wobbling apple cart”.
Has Ms Mcmurdy ever heard about 1 share, 1 vote?
Is this the advice and the opinion of a “columnist for the National Post, Canadian Business magazine MSN Money and co-anchor of MoneyWise”??
So what are some solutions to the ABCP Credit Squeeze?
We need to investigate who are these financial advisors Ms. Mcmurdy is referring?
What are their qualifications?
These advisors in many instances are only concerned with their bonuses, salaries and commissions. For example, In HSBC's statement of defence HSBC stated that Aastra would not have cared even if it knew that the ABCP it bought was backed by complicated derivatives such as credit default swaps and collateralized debt obligations. Aastra was interested only in the credit rating on the notes and the yield (http://www.financialpost.com/creditcrunch/Story.html?id=275411).
This is a prime example of governance at its worse and it starts at the top.
Who are the directors?
What are the directors doing to help these investors?
How many boards do they sit on?
Do they have the time to know what is actually going on with investors’ paltry $ 34 billion, and do they care????
Do they have the knowledge of what an ABCP is?
Do they care?
How many actually reside in Canada?
What decision – making process did they go through to formulate these ABCPs?
Or do they know that ABCP’S exist at the companies on which they sit as board members. Please note some of these directors have JOB SECURITY FOR THE NEXT TWENTY YEARS(below)!!!!!!!!!!!!!!!
What is management doing?
If an asset-backed commercial paper (ABCP) program is composed of a bankruptcy-remote special purpose vehicle (SPV), or conduit, that issues commercial paper (CP) and uses the proceeds of such issuance primarily to obtain interests in various types of assets, either through asset purchase or secured lending transactions. And if an ABCP program includes key parties that perform various services for the conduit, credit enhancement that provides loss protection, and liquidity facilities that assist in the timely repayment of CP. Then it is prudent that an ABCP seem to be fully protected or bonded, contrary to Ms Mcmurdy’s scornful remarks to investors.
(http://pages.stern.nyu.edu/~igiddy/ABS/fitchabcp.pdf).
In this instance some of the “key parties” include, HSBC Securities Canada; Canaccord Capital Corp.; Scotia Capital Inc., and Scotia Capitaux Inc., National Bank of Canada . who were supposed “to provide the liquidity needed in the first place to roll over the paper”.
Read my article for solutions:
Critiquing and contrasting “moral” stakeholder theory and “strategic” stakeholder: implications for the board of directors
Findings – “Value” for shareholder and stakeholder may not be mutually exclusive in some instances. MST may hold the key to giving the board a more useful, comprehensive framework of the firm's utility and purpose to society.
Practical implications – Organizations may be selected on their ethical performance by investors. Depending on whether ethical criteria are included in the definition of “firm's value”, decisions about which stakeholder theory to use become an issue of strategic importance to all organizations.
Originality/value – The paper illustrates how the board of directors as the governing body of the organisation may find that continuous assessment of the company's stakeholders is valuable in reducing risks.
http://www.emeraldinsight.com/Insight/viewContainer.do;jsessionid=AFFFA9B264B7619EFFD296FC452108FB?containerType=Issue&containerId=6012734 Critiquing and contrasting “moral” stakeholder theory and “strategic” stakeholder: implications for the board of directors
Dr. Rookmin Maharaj (pp. 115-127) Keywords: Boards of directors, Decision making, Market value, Stakeholder analysis
Please take a look at the board members for some of these companies (HSBC Securities Canada; Canaccord Capital Corp.; Scotia Capital Inc., and Scotia Capitaux Inc., National Bank of Canada).
The role of the board of directors is a complex and challenging task that is weighed down with conceptual, methodological and practical difficulties. Corporate governance has become progressively more important in the business world and has become inextricably linked to the process of decision-making within corporations.
The BOD being the top level of any corporation is therefore, the body whose responsibility it is to rigorously examine and advise management about high risk and the adverse affects of packaging and reselling debt such as these asset-backed commercial papers.
The institutions that packed and re-sold the debt as a savings product - principally Scotiabank and Canaccord Capital - should UPHOLD their responsibilities, HONOUR THE TRUST; ACT IN A FIDUCIARYCAPACITY TO INVESTORS, and HONOUR the reputation of THEIR RESPECTIVE firms.
Dr Maharaj’s Corporate Governance Decision-Making model indicates that tools (Skills Matrices, Evaluations and Interconnections) and variables (Knowledge, Groupthink, and Values) have positive relationships with Decision-making. These findings have important implications for board formulation and corporate governance in the future AND MAY REDUCE THE PROBABILITY OF fiascoes like ABCP happening in the future.
Read my article:
http://www.palgrave-journals.com/ jdg/ journal/v5/n1 /abs /2050074a.html
Dr. Rookmin Maharaj has developed a unique and revolutionary model that can identify the characteristics requisite for effective Corporate Governance within an organization that strikes the ideal balance between the formal and informal rules and regulations. Dr. Maharaj has researched with the top oil and gas, mining, chemical, and pipeline companies in North America. She continues to transform ideas into actions, ultimately increasing the bottom line for organizations.
Wednesday, April 16, 2008
The US IS IN A DEEP RECESSION!!!!
With the US IN DEEP RECESSION!!!! (http://www.financialpost.com/ story. html?id=326071)
Dr. Rookmin Maharaj’s Corporate Governance Model may be one of the solutions to bringing the US economy back on tract. Dr. Maharaj’s research work examines the characteristics (knowledge, groupthink, and values) and tools (interconnections, evaluations and skill matrices) can be used to select candidates to be nominated to the board to improve corporate governance Qualitative interviews with chairs, board members, CEOs in the leading energy, coal, pipeline, and chemical industries in Canada were conducted. The Quantitative phase included a survey questionnaire, which was sent to 1200 US and Canadian executives, data were collected and statistically analyzed. The findings indicated a temporal linkage between board characteristics, and tools, on decision-making, the Formal rules (SOX related rules) had no significant relationship with decision-making. Dr. Maharaj’s research is unique, as this is the first time that board characteristics have been operationalized and a model developed to test the effectiveness of directors serving on boards. “Boards and Management can no longer expected to be decorative, but are expected to exercise more influence and power and become more engaged with management, other board members and all stakeholders of the organization”(Maharaj, R., 2008).
Dr. Maharaj’s articles and blogs are a must read.
1) International Journal of Disclosure and Governance - Corporate Correspondence: ... I thank Dr James Gillies, Professor Emeritus of Policy, and founding ...www.palgrave-journals.com/jdg/journal/v5/n1/full/2050074a.html
2) http://corporategovernancesoxboards.blogspot.com/
3) Corporate Governance - Critiquing and contrasting “moral” stakeholder theory and “strategic” stakeholder: implications for the board of directors Rookmin Maharaj (pp. 115-127)
http://www.emeraldinsight.com/10.1108/14720700810863751
Purpose – This paper aims to critique moral stakeholder theory (MST) and to contrast it to earlier strategic stakeholder approach (SSA). Design/methodology/approach – Interview data were gathered from top executives at 12 companies in the energy sector in Canada and an in-depth literature review was conducted on MST and SSA. Findings – “Value” for shareholder and stakeholder may not be mutually exclusive in some instances. MST may hold the key to giving the board a more useful, comprehensive framework of the firm's utility and purpose to society. Practical implications – Organizations may be selected on their ethical performance by investors. Depending on whether ethical criteria are included in the definition of “firm's value”, decisions about which stakeholder theory to use become an issue of strategic importance to all organizations. Originality/value – The paper illustrates how the board of directors as the governing body of the organisation may find that continuous assessment of the company's stakeholders is valuable in reducing risks.
http://www.emeraldinsight.com/Insight/viewContainer.do;jsessionid=AFFFA9B264B7619EFFD296FC452108FB?containerType=Issue&containerId=6012734
Critiquing and contrasting “moral” stakeholder theory and “strategic” stakeholder: implications for the board of directors Rookmin Maharaj (pp. 115-127) Keywords: Boards of directors, Decision making, Market value, Stakeholder analysis
There are several references to the management/boards refusal to be fair to their stakeholders, for example,
1) “Senator Obama has made frequent reference to the spread between CEO compensation and average worker pay…..We have a [moral] deficit when CEOs are making more in ten minutes than some workers make in ten months."
2) According to David Rosenberg, “The U.S. economy has landed in recession, according to an economist at brokerage firm Merrill Lynch. David Rosenberg, Merrill Lynch's chief North American economist, said Friday’s employment report — which showed the U.S. jobless rate jumped to a two-year high of five per cent in December on weaker-than-expected job creation — "strongly suggests that an official recession has arrived." 'To say that the backdrop is "recession-like" is akin to an obstetrician telling a woman that she is "sort of pregnant."
References:
Dr. Rookmin Maharaj, 2008: http://www.emeraldinsight.com/10.1108/14720700810863751
http://www.cbc.ca/money/story/2008/01/08/merrilllynchrecession.html
http://www.americanthinker.com/2008/04/obama_ceo_pay_and_the_politics.html
Dr. Rookmin Maharaj’s Corporate Governance Model may be one of the solutions to bringing the US economy back on tract. Dr. Maharaj’s research work examines the characteristics (knowledge, groupthink, and values) and tools (interconnections, evaluations and skill matrices) can be used to select candidates to be nominated to the board to improve corporate governance Qualitative interviews with chairs, board members, CEOs in the leading energy, coal, pipeline, and chemical industries in Canada were conducted. The Quantitative phase included a survey questionnaire, which was sent to 1200 US and Canadian executives, data were collected and statistically analyzed. The findings indicated a temporal linkage between board characteristics, and tools, on decision-making, the Formal rules (SOX related rules) had no significant relationship with decision-making. Dr. Maharaj’s research is unique, as this is the first time that board characteristics have been operationalized and a model developed to test the effectiveness of directors serving on boards. “Boards and Management can no longer expected to be decorative, but are expected to exercise more influence and power and become more engaged with management, other board members and all stakeholders of the organization”(Maharaj, R., 2008).
Dr. Maharaj’s articles and blogs are a must read.
1) International Journal of Disclosure and Governance - Corporate Correspondence: ... I thank Dr James Gillies, Professor Emeritus of Policy, and founding ...www.palgrave-journals.com/jdg/journal/v5/n1/full/2050074a.html
2) http://corporategovernancesoxboards.blogspot.com/
3) Corporate Governance - Critiquing and contrasting “moral” stakeholder theory and “strategic” stakeholder: implications for the board of directors Rookmin Maharaj (pp. 115-127)
http://www.emeraldinsight.com/10.1108/14720700810863751
Purpose – This paper aims to critique moral stakeholder theory (MST) and to contrast it to earlier strategic stakeholder approach (SSA). Design/methodology/approach – Interview data were gathered from top executives at 12 companies in the energy sector in Canada and an in-depth literature review was conducted on MST and SSA. Findings – “Value” for shareholder and stakeholder may not be mutually exclusive in some instances. MST may hold the key to giving the board a more useful, comprehensive framework of the firm's utility and purpose to society. Practical implications – Organizations may be selected on their ethical performance by investors. Depending on whether ethical criteria are included in the definition of “firm's value”, decisions about which stakeholder theory to use become an issue of strategic importance to all organizations. Originality/value – The paper illustrates how the board of directors as the governing body of the organisation may find that continuous assessment of the company's stakeholders is valuable in reducing risks.
http://www.emeraldinsight.com/Insight/viewContainer.do;jsessionid=AFFFA9B264B7619EFFD296FC452108FB?containerType=Issue&containerId=6012734
Critiquing and contrasting “moral” stakeholder theory and “strategic” stakeholder: implications for the board of directors Rookmin Maharaj (pp. 115-127) Keywords: Boards of directors, Decision making, Market value, Stakeholder analysis
There are several references to the management/boards refusal to be fair to their stakeholders, for example,
1) “Senator Obama has made frequent reference to the spread between CEO compensation and average worker pay…..We have a [moral] deficit when CEOs are making more in ten minutes than some workers make in ten months."
2) According to David Rosenberg, “The U.S. economy has landed in recession, according to an economist at brokerage firm Merrill Lynch. David Rosenberg, Merrill Lynch's chief North American economist, said Friday’s employment report — which showed the U.S. jobless rate jumped to a two-year high of five per cent in December on weaker-than-expected job creation — "strongly suggests that an official recession has arrived." 'To say that the backdrop is "recession-like" is akin to an obstetrician telling a woman that she is "sort of pregnant."
References:
Dr. Rookmin Maharaj, 2008: http://www.emeraldinsight.com/10.1108/14720700810863751
http://www.cbc.ca/money/story/2008/01/08/merrilllynchrecession.html
http://www.americanthinker.com/2008/04/obama_ceo_pay_and_the_politics.html
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