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The European Commission's Green Paper on corporate governance and remuneration policies in financial institutions madenumber of significant suggestions, including:
a) limiting the number of board memberships, and requiring greater expertise and qualificationson boards;
b) mandating risk committees and stronger risk management functions;
c) fortifying the legal liability of directors under an expanded duty of care;
d)regulating or restricting stock options; and
Nearly two-thirds of Fortune 1000 company executives believe that employees' loss of trust in their employees will contribute to increased turnover in the coming months. This insightful article by Sharon AllenofDeloittetells why this hasan impact on the bottom line, and what boards should do about it.
The SEC has set forth a time linefor finalized rules as well as tentative timing for future proposals and rulings, with respect to all the changes and studies required by the Dodd-Frank Wall Street Reform and Consumer Protection Act that as signed into law on July 21, 2010.
http://www.sec.gov/spotlight/dodd-frank.shtml
The Dodd-Frank Act itself can be found here:
Professor Saito of Kyoto Sangyo University has producedextensiveanalysis and several papersshowing thatJapanese companies that appoint at least one outside director experience improvement in operating performance and more dependable projections.
Boards with and without Outside Directors: An Empirical Comparison
The Determinants of Board Composition when Managers Control Director Selection: Evidence from Japan
Professor Kyoji Fukao and Professor Kwon of Nihon University have published a masterful analysis of what has been going wrong with Japan's economy during the past 20 years and what can be the key drivers of growth going forward.
The report of the NYSE Commission, issued this fall, summarized this particularreccommendation in the following way in its press release:
While independence is an important attribute for board members, the NYSE’s Listing Standards do not limit a board to just one non-independent director, and boards should seek an appropriate balance between independent and non-independent directors to ensure a proper mix of expertise, diversity and knowledge.
Entitled Charting a New Course for Growth: Recommendations for Japan's leaders, the report has an intriguing manga cover and is based on replete economic analysis. The White Paper and related materials can be downloaded at: http://www.accj.or.jp/gstf.
The well known and well-attendedTBLI Conference will be held on the 11th and 12th of November in London. http://www.tbliconference.com/ This will be the 12th TBLI Conference so far.
(BDTI has recently received this collection of interesting vignettes and musings by a fund manager in Tokyo, written over the past year. BDTI has received permission to publish them from both the recipient and the author.)
ON BEATING UP ONE FALL-GUY
On September 28, ACGA sent a formal letter tothe Ministry of Justice and keymembers ofthe Legislative Advisory Council's Company Law Sub-Committee in Japan. The letter was made public and is available on BDTI's data libary athttp://bdti.mastertree.jp/f/l0ngs7zm.