Tag Archive for ‘Risk Management’
Reporter Jake Bernstein – who won a Pulitzer Prize for a series of stories on questionable Wall Street practices – says Margin Call is a “briskly paced and marvelously acted” film which tells “the story of a Wall Street that has evolved from an economic helpmate to an economic predator.”
Columnist Gael O’Brien says recent crises at University of California Davis, Syracuse University and Penn State University raise questions about the role of risk management on campuses. One problem, she writes, is that university leaders “often don’t have practice thinking through how their values, and those of the institution, will come into play in a variety of different potential situations.”
The economic crisis, increased rules and regulations, and heightened scrutiny of boards’ roles have “corporate directors feeling pressure to be more effective in the boardroom,” according to an annual survey of directors of large companies by PricewaterhouseCoopers. Key concerns include executive compensation, risk management, strategy, succession planning, information technology security and fraud.
Stanford University professor David Larcker says context is critical in the choices that organizations make in designing governance systems and the impact those choices have on executive decision-making and the organization’s performance. “There is no question to us that ‘governance matters,’” he writes. “The fundamental challenge is to understand when and how it matters.”
Nearly 39 percent of Novartis shares were voted against the pharmaceutical giant’s executive compensation plan. Shareholder critics had expressed particular concern over the size and structure of payouts for Novartis Chairman Daniel Vasella, who has in recent years been awarded a package with an estimated market value of about $21 million annually.
Among the December 2009 proxy rule changes approved by the SEC was a requirement that companies discuss and analyze risks that are reasonably likely to have adverse effect on the company’s reputation and/or sustainability. This means companies must not only identify the risks facing them but also determine the probability and severity if realized and how that relates to the company’s compensation policies and programs.
Reporter Jesse Eisinger suggests that Goldman Sachs’ announcement last week of a plan to increase transparency and disclosure does not resolve some big questions about the investment banks’ role in financial markets. “Could there be an argument that Goldman should break up into three smaller, more focused companies?” he asks. “It would be better for the financial system, and just might lead to the self-improvement that Goldman is searching for.”
The investment banking giant, seeking to repair damage to its reputation suffered in the aftermath of the global financial crisis, said its management and board had adopted and begun implementing 39 new policies and practices that represent a “fundamental re-commitment” by the firm to “reputational excellence” and increased transparency and disclosure.
Women serving on corporate boards are far more likely than their male counterparts to favor increased boardroom diversity, new regulations for executive compensation, proxy access for shareholders and enhanced risk management, according to a new survey of corporate directors.
Perhaps not surprisingly, heightened concern over risk to corporate reputation is “noticeably” affecting how senior management and boards are doing business, according to a new survey of corporate executives. The survey found the timeliness and quality of information shared with boards is improving while more time is being spent on risk management by directors and executives.