Yearly Archives: 2015
The weak global economic conditions and an increasingly competitive container shipping sector has hit the bottom lines of shipping and transportation companies across the world, but effective corporate governance helped Neptune Orient Lines Limited (NOL) steer its course through the waves of this challenging business climate. A strong partnership between NOL’s board and its management ensured operational efficiency and rigorous cost management for this shipping and transportation group, which handles about three million 40-foot equivalent units (FEUs) across 160 ports worldwide.
The use of technology in the boardroom is not a new concept. The ability to consume a high volume of corporate information delivered through a browser that more directors are happy to consider a portable tablet solution as a viable alternative.
No matter your level of support for or interest in the issue of diversity in the boardroom, no one would disagree that it is a ‘hot topic’ in corporate governance circles and corner offices around the globe. Diversity in the boardroom can mean many things. When I started recruiting corporate directors in the United States about 18 years ago, diversity most often referred to ethnic diversity. Specifically there were efforts of various magnitudes to increase the representation of African Americans and Hispanics on boards.
The so-called ‘Florange Law’ introduced a double voting right in every French-listed company. The sole opportunity for shareholders and firms to restore the ‘one share, one vote’ principle is to adopt an ‘opt-out’ provision by modifying the articles of association. This matter has become urgent since the double voting rights will be definitely granted in April 2016 to holders of registered shares after a registration period of two years in the company’s registry of shareholders.
If your general counsel (GC) unexpectedly resigned tomorrow without a successor, consider how many moving parts would come to a halt. Who would protect your company from the many risks associated with the business in our heightened regulatory environment? Who would manage your legal department and oversee your outside counsel?
Credit rating agencies, such as Moody’s, and shareholder advisory groups, such as Institutional Shareholder Services, now assess the effectiveness of boards’ risk oversight practices when rating firms and issuing voting recommendations. At the same time, board members are facing greater legal liability when risks are not adequately managed
Some directors embrace it as the positive, value-added experience that a good evaluation can be. Some either want to rush through it or treat it as an exercise in compliance and simply ‘tick the boxes’. Others, who may have had a ‘bad’ experience with evaluation, consider it a waste of time or just don’t think they need it.
Understanding the risks in these emerging markets is critical to being able to capitalise on these developing opportunities. In particular, emerging markets are often associated with corruption and nepotism; where the business practices considered as ethical and compliant in developed countries may not yet apply. Tackling fraud, bribery and corruption is therefore a crucial step in successfully entering or expanding in emerging markets in regards to regulatory pressure but also in a broader strategic vision of establishing sustainable business and operations in those countries.
The concept of good governance is that boards can contribute in powerful ways as they advise, support and challenge management teams tasked with delivering results. Governing well is not easy. There can be tension between the board and management, between leadership and various stakeholders and even around the boardroom itself. Whether or not this tension is harnessed into constructive professional discourse depends on who is gathered around the table and, importantly, how they work together. When boards work well together, are cohesive with the management teams of their organisations and honour the visions of multiple, diverse stakeholders, governance can become a competitive advantage. When they don’t, corporate governance can be incredibly destructive.
Norway’s adoption of a 40 per cent gender quota for corporate boards in 2003 was a watershed moment, with global governance ramifications that we are only just beginning to understand. More than a dozen countries have since followed Norway’s lead, while many others have chosen voluntary ‘comply or explain’ gender targets. Consistent with its free-market values, the United States maintained the status quo and did not follow the global trend.