Posts Tagged ‘corporate governance’
Featured in
Governance Research Digest – May 2013
Summary
Environmental Investment Organisation published the Environmental Tracking Carbon Rankings, which examine the GHG emissions and transparency of the 800 largest companies globally. This latest set of Carbon Rankings build on the methodology established previously for the ET 2011 Carbon Rankings, where companies were placed into one of four Disclosure and Verification categories and then ranked by carbon intensity (tonnes of CO2 equivalent per million US dollars of turnover) based on Scope 1, 2 & 3 emissions.
Key findings
- Only 37 percent of the world’s largest companies report their greenhouse gas emissions fully and correctly.
- BASF, (Complete & Verified), comes top, disclosing all 15 Scope 3 Categories, according to the GHG Protocol Scope 3 Reporting Standard, with a combined Scope 1, 2 & 3 emissions intensity of 932.74 tCO2e/$M turnover.
- US based First Energy comes last, with no public data and an inferred combined Scope 1, 2 & 3 emissions intensity of 10,342.03 tCO2e/$M turnover.
- RWE, (Complete & Verified), has the highest publicly disclosed Scope 1 & 2 figure of 166,200,000 tCO2e, with a combined Scope 1, 2 & 3 intensity of 3,870.19 tCO2e/$M turnover.
- Europe leads the world on all disclosure metrics: 35% of companies report complete and independently verified data. This compares to 11% for the BRICS, the lowest of any region.
- 8 of the top 10 companies in the ET Global 800 are Europe based.
- 267, or 33%, of companies within the ET Global 800, report one or more Scope 3 categories. However, only 15, or 2%,report 5 or more Scope 3 categories.
Author(s)
Environmental Investment Organisation
Source
Featured In
Governance Research Digest – April 2013
Summary
Corporate Citizenship, part of The Good Business Group, released a report mapping out the trends believed to mould the next decade of business practise. As well as outlining how businesses are likely to react to challenges to come, the “Future Business – The Four Mega-Trends that every company needs to prepare for” report provides techniques and tools for businesses to use when preparing for predicted changes in their working landscape.
Key Findings
- In ten to twenty years four mega-trends are going to shape the future operating environment for companies.
- Megatrend one, ‘Crunch’ will target the rising pressure on key resources such as food, water and energy. As a result, businesses in the 2020s will need to sustainably manage scarce resources to ensure long-term success.
- Megatrend two, ‘Fragment’, generated by current power structures diffusely distributed between citizens, not-for-profits, governments and corporations, will determine companies to work with more varied organisations and plan for uncertainty
- Megatrend three, ‘Connect’, triggered by the accelerating growth of online communication, will force businesses to respond to challenges such as channel overload, data leaks and security
- Megatrend four, ‘Rebalance’, driven by the increasing importance of emerging markets, will produce a structural shift in the world economy and companies, from multinational to multilocal. As a result, businesses will adapt by tightly tailoring their products and brands to local circumstances.
- Although certain areas of a business may be better suited to meet the challenges that arise from a particular megatrend, it is likely that these challenges will merge and overlap meaning collaboration between departments is needed to ensure success.
- Two tools suggested by Corporate Citizenship to plan ahead are Horizon Scanning or Scenario Scanning.
Author(s)
Corporate Citizenship
Source
Featured In
Governance Research Digest – March 2013
Summary
World Economic Forum in collaboration with KPMG International issued a report that presents the main global trends impacting the relationships between sectors, highlights the value that civil society provides and explores how the role of civil society might change over the coming two decades as a result. “The Future Role of Civil Society” report is the outcome of an eight-month project, in collaboration with KPMG International and involving over 200 leaders and experts, looking at how trends in technology, politics, society, economics and the environment are affecting the evolution of civil society and its implications for stakeholders.
Key Findings
- The power and influence of civil society are growing and should be harnessed to create trust and enable action across sectors.
- By being engaged with government, business and international organizations, civil society actors can and should provide the resilient dynamism the world urgently needs.
- The changes that civil society is undergoing strongly suggest that it should no longer be viewed as a “third sector”; rather, civil society should be the glue that binds public and private activity together in such a way as to strengthen the common good.
- In playing this role, civil society actors need to ensure they retain their core missions, integrity, purposefulness and high levels of trust.
Author(s)
World Economic Forum in collaboration with KPMG
Source
Featured In
Governance Research Digest – March 2013
Summary
ACGA gave a briefing on recent developments in corporate governance in Asia, looking at factors impeding reform in North Asia and promoting improvements in Southeast Asia. The presentation, “New Developments in Corporate Governance Reform in Asia: Northern Chills, Southern Warmth” summarised the state of play in several major Asian economies and the impact of culture and custom on modern notions of corporate governance.
Key Findings
- CG scores for most Asian markets have been quite unstable regarding corporate governance rules and practices:
- better for rules relating to the timeliness and frequency of financial reporting, disclosure of director share transactions,disclosure of substantial ownership stakes (5% and above ) and whether audit committees are mandatory.
- worse for non-financial reporting,voting by poll, legal remedies for shareholders, definitions of independent director, quality of CG Codes, and preemption rights.
- Japan, Korea and Taiwan share certain cultural, legal and political similarities that, in combination, impede and undermine fundamental corporate governance reform.
- Hierarchical and relatively more closed corporate cultures.
- An ongoing battle between regulators, conservative business interests and legal scholars over company law / board reforms.
- Weak governments that lack consensus on corporate governance reform and show little leadership.
Author(s)
ACGA (Asian Corporate Governance Association)
Source
Featured In
Governance Research Digest – March 2013
Summary
Deloitte Global Center for Corporate Governance produced a new survey of recent efforts — legislative and otherwise — to increase the participation of women in boardrooms across the globe. The survey, “Women in the boardroom: A global perspective” is in its third edition, highlights initiatives, spanning 25 countries and six continents, aimed at balancing the scales in favor of a more diverse and gender-inclusive boardroom.
Key Findings
- In some parts of the world, governments commit to expand opportunities for women; still others have seen the movement toward quotas as another response to the financial crisis.
- The Australian corporate governance code, known as the ASX Corporate Governance Council Principles and Recommendations, was re-issued on 30 June 2010 by the ASX Corporate Governance Council and now contains a number of new recommendations relating to gender diversity.
- China’s corporate governance code (Code of Corporate Governance for Listed Companies in China) does not mention gender as a desirable quality or background for board candidates.
- In December 2012, the lower house of the Parliament of India passed the Companies Bill that improved corporate governance practices throughout India. Chapter XI, titled Appointment and Qualifications of Directors, states that public companies must have at least one woman director.
- In New Zealand, publicly listed companies will now come under pressure to promote women to boards and management under proposed new stock exchange rules.
- The Brazilian Senate is discussing the inclusion of compulsory quotas for state and mixed-capital enterprises, which would eventually require a 40 percent representation of women on boards by 2022.
Author(s)
Deloitte
Source
Featured In
Governance Research Digest – February 2013
Summary
Security and Exchange Board of India (SEBI) issued a consultative paper on review of corporate governance norms in India. The regulator also pitched for aligning rules relating to listed entities along with the proposed Companies Bill that is awaiting Parliament’s approval.
Key Findings
- SEBI has proposed separating the CMD position in a company mainly to avoid concentration of power with one person.
- The paper suggested that the appointment of independent directors should be only by minority shareholders, such directors should be formally trained to be on company boards and they should also be regularly evaluated for their performance.
- The regulator also suggested that all independent directors should go through a compulsory training session, followed by an exam, both under National Institute of Securities Markets (NISM), a training body under SEBI.
- However, it has not stipulated any exemptions even for reputed independent directors in the country, who, with years of experience and a solid track record, may not be willing to take such tests, a corporate lawyer pointed out.
- SEBI is also aiming to change Clause 49 of the listing agreement between companies and stock exchanges to align it with the proposed Companies Bill.
Author(s)
Security and Exchange Board of India (SEBI)
Source
1. The Ethics of Banking: Conclusions from the Financial Crisis (Peter Koslowski)
Did the attitude of the banking industry towards ethical issues play a starring role in the financial crash of 2008? In this book, the recently-deceased expert on ethics and finance Peter Koslowski provides a thorough overview of the ethical requirements relevant to all banking business areas… most of which have been far from fulfilled in recent years. Review by Cristina Carrillo. Read more
2. The Politics of Corporate Social Responsibility: The Rise of a Global Business Norm (Ursula Mühle)
Over the past decade, there has been a global call for businesses to behave in a socially responsible manner. The notion of a socially responsible business has been gaining momentum through the emergence of Corporate Social Responsibility policies, initiatives, and organisations. However, there are few studies addressing how and why CSR has made its way into particular policies and institutional arrangements. Therefore, there is every reason to welcome a new academic work exploring why the world is witnessing the diffusion of CSR. Review by Selena Lucien. Read more
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Author: Peter Koslowski
Publisher: Springer
Year: 2011
Pages: 214
Did the attitude of the banking industry towards ethical issues play a starring role in the financial crash of 2008? In this book, the recently-deceased expert on ethics and finance Peter Koslowski provides a thorough overview of the ethical requirements relevant to all banking business areas… most of which have been far from fulfilled in recent years.
In a great introduction, the author outlines the main arguments used by financial industry managers in order to justify the alleged “irrelevance of ethics” in modern finance: creation of shareholder value and maximum return on investment are priority and non-negotiable, as well as a strict adherence to neoliberal economic orthodoxy (which involves an unconditional belief in full rationality of market participants, perfect information and infallibility of the market). Considering these approaches to be utterly unsustainable and irresponsible, professor Koslowski devotes the rest of the book to dismantling them one by one, with an authority informed by his deep knowledge of the particularities and nuances of the banking business.
The first part shows the conceptual alternatives that underpin Finance Ethics: Ethical Economy, Economic Ethics and Business Ethics. The second and most extensive part details a number of ethical and economic implications of the markets for credit, capital and derivatives which, together with bad corporate governance, had a decisive influence on the rise of the financial crisis of 2008, as explained in the third part.
The book can be read at different levels. On the one hand, anyone interested in the subject can easily make the most of it, thanks to the plain language used, the many examples and the references to cases we all know through the media. However, some of the sections on capital and derivatives markets do provide arguments of significant technical depth, more aimed at financial professionals, who can find economic, legal, academic… and even semantic, philosophical and theological arguments.
In short, The Ethics of Banking: Conclusions from the Financial Crisis is essential reading for those who think that the future sustainability of the banking industry relies on a rigorous application of the ethical filter to all its business areas.
Review by
Cristina Carrillo, CSR International
1. Who’s Running the Company: A Guide to Reporting on Corporate Governance
This media guide aims at helping business journalists report on corporate governance and raise public awareness of the impact it has on businesses, shareholders, and the broader community of stakeholders. Read more
2. The Icelandic Banking Crisis: A Reason to Rethink CSR?
This article discusses the ‘Icelandic banking crisis’ in relation to the notion of corporate social responsibility (CSR). Read more
3. The Ethics of Gifts and Hospitality
A new briefing from the IBE considers some of the ethical issues around the giving and accepting of corporate gifts and hospitality and outlines good practice. Read more
4. 2012 Report on Sustainable and Responsible Investment Trends in the United States
A new report was released tracking growth and reflecting trends within the sustainable, responsible, impact (SRI) investment industry in the U.S. Read more
5. Internet-Based Corporate Disclosure and Market Value: Evidence from Latin America
Authors examine the relationship between an Internet-based corporate disclosure index and firm value, and evaluate the relatively understudied corporate use of the Internet by firms. Read more
6. On Materiality and Sustainability: The Value of Disclosure in the Capital Markets
The Initiative for Responsible Investment at Harvard University has written a white paper on corporate disclosure entitled “On Materiality and Sustainability: The Value of Disclosure in the Capital Markets”. Read more
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Featured In
Governance Research Digest – November 2012
Summary
This media guide aims at helping business journalists report on corporate governance and raise public awareness of the impact it has on businesses, shareholders, and the broader community of stakeholders. Topics include the media’s role reporting on corporate governance, how a board of directors functions, what financial reports reveal, and how to track down information that sheds light on a company’s performance in an informed way.
Key Findings
- In an era of rapid globalization and volatility, entire economies can depend on how individual businesses are governed.
- There is a clear connection between well governed companies and better company performance, with benefits such as easier access to finance, improved efficiency, and enhanced market reputation.
- Corporate governance is at the heart of what goes right and wrong in business.
- Corporate governance describes the structures and procedures to direct and control companies, and the processes used by the board of directors to monitor and supervise management in discharging the board’s accountability to shareholders for the running of the company and the performance of its operations.
- Corporate governance stories essentially are about people:
- Shareholders who want to change company policies; struggles between directors — who are charged with setting the company’s strategy and policy — and managers, who might have different ideas.
- Transparency and accountability play a large role in such stories, along with actions by regulators, stock exchanges, shareholders and stakeholders.
Author(s)
IFC Global Governance Forum and International Centre for Journalists
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