¿Por qué no somos todos inversores de Capital Riesgo?

Habéis pensado por qué es que los inversores de capital riesgo pueden pagar más por empresas, incluyendo en contra de empresas del mismo sector, y todavía generan altas rentabilidades. Incluso pagando más que las empresas que eventualmente compran esas empresas del inversor de capital riesgo, y todavía generan beneficios por encima de lo común.

El secreto del inversor de capital riesgo es contratar la mejor gestión, pagarles alto y vinculado a resultados y financiarlo al máximo con deuda barata. El resto es beneficio.

Comprar la empresa, utilizar el máximo de deuda, hacerla eficiente, en beneficios y en facturación, incluyendo invertir para el futuro, mantener un riguroso control sobre los gastos y el flujo de caja, y vender una empresa fuerte y rentable al precio máximo. Después, repagar la deuda barata y tener suficiente restante para generar rentabilidades de 30%, 40%, incluso 200% sobre el poco capital que se invirtió inicialmente. Todos podemos ser inversores de capital riesgo.

Invertir en empresas, contratar buena gestión, pagarles sueldos altos basado en sus resultados, maximizar la deuda barata que se utiliza (que también sirve como disciplina a la gestión), invertir en el futuro, construir el negocio, devolver TODO el flujo de caja en exceso a los accionistas el momento en que se genere.

Siguiendo esta fórmula, la rentabilidad sobre el capital invertido será altísimo, igual que pasa con los inversores de capital riesgo.

Cuando se oye que una empresa ha repagado toda su deuda, oigo una gestión comfortable y oigo una baja rentabilidad sobre capital. Cuando oigo que una empresa tiene flujo de caja que no sabe cómo utilizar (hacer una adquisición, mantenerlo por seguridad.....no sé...), oigo una gestión a gusto y oigo una baja rentabilidad sobre capital.

Vamos a hacer como los inversores de capital riesgo, ¡nuestros beneficios mejorarán!

Probe into AIG targets reinsurance offshoot

This is the same company whose Chairman recently complained about all the legal attention his company and his industry was receiving.

There seems to be something at least to investigate so, the way to end it is to cooperate fully, quickly and without obfuscation. Simple as that!

See full Story.

Monografía sobre gobierno corporativo y transparencia informativa de las empresas cotizadas españolas

La Comisión Nacional del Mercado de Valores (CNMV) ha publicado una nueva Monografía titulada “e-gobierno corporativo y transparencia informativa en las sociedades cotizadas españolas: un estudio empírico”.

En este trabajo se examina la relevancia que la tecnología, y en especial Internet, tiene en la mejora del gobierno corporativo y de la transparencia de las compañías cotizadas. La oportunidad de este estudio se justifica por el creciente interés de los organismos
supervisores de los mercados de capitales europeos y estadounidense en regular los contenidos y la forma de difundir la información sobre gobierno corporativo en Internet.

Ver Nota de Prensa completa, en formato pdf.

How to Run an Effective Family Business Board of Directors

Family owned businesses face unique situations when dealing with governance issues. This seminar, designed to be interactive and participant driven, will address those special concerns. Brought to you by the NACD's Board Leadership Seminar Series, the program starts with a morning of presentations by a faculty of experienced corporate governance practitioners -- two family business advisors, a second-generation family CEO, and a fourth-generation family director.

Date: Wednesday, April 27, 2005
City: San Francisco, CA
Location: Fairmont Hotel
Address: 950 Mason Street
San Francisco, CA
94108
Phone: 415-772-5000

See full NACD Seminar Details

Automated Sarbanes-Oxley Controls Assessment Debuts

From Supply & Demand Chain Executive Magazine:

Business and technology consulting firm Answerthink has debuted an automated Sarbanes-Oxley controls assessment service designed to evaluate how effectively companies are using controls capabilities within Oracle, PeopleSoft and other enterprise resource planning (ERP) systems.

The service is designed to help companies lower the cost of financial controls related to Sarbanes-Oxley compliance and provides recommendations for how companies can further automate, strengthen and standardize controls.

See full Article.

SCM Tools Offer Compliance Help

From ADT mag:

Companies that used manual tracking techniques in 2004 to meet initial Sarbanes-Oxley compliance deadlines are now ripe for considering tools to automate compliance tracking, according to analysts and industry watchers.

For those companies that are ready to automate at least some processes, tools that fall under the ever-expanding label of software change and configuration management can help.

See full Article.

Scottish Institute President Criticises additional burdens on business

The President of The Institute of Chartered Accountants of Scotland (ICAS) has criticised the additional burdens placed on business in the UK .

In a speech to Highland Area members at their annual dinner in Nairn ( Friday 25 February 2005 ), Ian Robertson cited the example of the application of the new ethical standards on audit promulgated by the Auditing Practices Board (APB).

See full Press Release.

Countries would benefit by adopting International Accounting Standards

From Lanka Business online:

The International Accounting Standards Board (IASB) said countries would benefit by adopting International Accounting Standards.

Uniform standards can help investors compare accounts and aid local companies to access international markets.
"We have to come up with one single set of high quality global standards. So it doesn’t matter whether a transaction takes place here is Colombo or In Canberra, or in Copenhagen or in Chicago we would account for it in the same way," said David Tweedie, Chairman, IASB speaking at a Financial Reporting Faculty gathering of the local institute of Chartered Accountants recently.

He says multinational companies, who are investing heavily in Sri Lanka, are keen to see uniform accounting rules.

"Sixty countries use sixty different ways of accounting and some teams of accountants have to put all these accounts back into US or Sri Lankan standards whatever the parent company had/ It is a complete waste of resources," he said.

FEE comments on Proposal for Diretive Amending 4th and 7th Directives

In the aftermath of recent scandals both in Europe and elsewhere FEE particularly supports:
• A fuller disclosure of related party transactions and of off-balance sheet arrangements including SPEs;
• A new focus on corporate governance disclosures;
• A clarification of the board responsibilities, notably the collective board responsibility.

See full Comments in pdf format.

Clarifying the confusion about IFRS, Sarbox et al

There's certainly no shortage of information around. Over the last year or so, the accounting and business press has been full of articles about corporate governance, IFRS and Sarbanes Oxley. Many of these go into a lot of technical detail, but don't always clarify the basics. Sometimes the more you read, the more confused you become.

A huge number of organisations have still not taken on board the new requirements. In fact, many are not even clear about the fundamentals.

See full Report in pdf format.

Conference: Changing Role of Finance Director

The environment in which accountants are operating today is rapidly changing, according to The Institute of Chartered Accountants of Scotland (ICAS).

Announcing its Accountants in Business Conference, the Scottish Institute points out that it has never been so important to prepare for the future.

See full Details.

POBA recommends strengthening of independent arbitration for accountancy disputes

The Professional Oversight Board for Accountancy (POBA), an operating body of the Financial Reporting Council, today issues its report on aspects of the UK's six chartered accountancy bodies' procedures for dealing with complaints and member discipline.

It has found that the bodies were generally making effective progress in implementing the recommendations made in a previous report by the Review Board of the Accountancy Foundation.

However, POBA believes it is necessary to reaffirm certain recommendations where it considers progress to be insufficient and it believes that the procedures available for dealing with service related complaints would be enhanced by an independent arbitration service.

See full Press Notice.

Ending SEC reporting will save bank $200,000

A US bank is showing that the cost of compliance is not justified. Delisting is an option for them.

See full Article.

The Human Side of Compliance

CFOs often complain that the Sarbanes-Oxley Act represents a harsh overreaction to the corrupt acts of a few bad apples. Besides, they say, the new law cannot prevent fraud if an unethical manager is determined to skirt the rules. This argument points to one of the steepest challenges of sustaining compliance over the long haul: people. "As good fraud auditors already know, any individual -- from the most pious to the most incorrigible -- can be prone to commit fraud due to fundamental 'people factors' that emerge given the right external stimulus," notes Dwayne Jorgensen, director of the Sarbanes-Oxley services practice for consulting firm CTG's information security solutions division in Duluth, Ga. Public companies have strengthened their financial reporting processes and installed new technology to help monitor internal controls, but one bad apple on staff can poison those staggering investments. Companies with a long-term commitment to Sarbanes-Oxley compliance and corporate governance address the human challenge through effective communication, compliance training and staffing decisions. Most important, compliance leaders translate the abstract notion of "tone at the top" into a practical and visible component of daily decision-making throughout the organization.

See full Article.

Current Developments for Audit Committees 2005

Over the past two years, audit committees have worked to incorporate required changes into their charters and agendas, and now are shifting attention to their ongoing effectiveness. As audit committees witness the continuing scrutiny of directors' actions when corporate crises come to light, they're taking a hard look at whether—and how—they're balancing their roles between monitoring management and advising management. And they're demonstrating their commitment to the job, by meeting more often and for longer periods, and ensuring meeting discussions are substantive.

See full Article.

International Financial Reporting Standards - Why U.S. companies need to get in the game!

Marie Kling
PricewaterhouseCoopers
17-February-2005

Why you need to get on board

International Financial Reporting Standards (IFRS) are gaining momentum. Seven thousand companies in Europe converted to IFRS as of January 1, 2005. Australian companies also converted to IFRS as of January 1, 2005, in conjunction with the member states of the European Union. Other countries, such as Russia, are also making significant strides towards using IFRS more widely. And very recently, the Accounting Standards Board of Japan agreed to launch a joint project to reduce the differences between Japanese accounting standards and IFRS.

See full Article.

Quality of corporate disclosure is dismal

Johannesburg - SABMiller, Anglo American, BHP Billiton and Gold Fields are the only companies on the JSE Securities Exchange that provide useful details on executive remuneration packages.

The first three have their primary listings in London while Gold Fields sports a listing on the New York Stock Exchange.

One South African corporate governance analyst points out that the better quality of information provided by these companies reflects their considerable exposure to non-South African shareholders, who are more demanding.

See full Article.

Little-Noticed SOX Provision Gains Traction

From Law.com:

Two-and-a-half years after the passage of the Sarbanes-Oxley Act, a little noticed provision on whistleblowing is gaining traction.

Within the sweeping corporate governance measures introduced by Sarbanes-Oxley in 2002, Congress also enacted a provision designed to protect employees who face retaliation after reporting instances of a company's financial fraud by allowing them to sue their employer. The law is intended to shield employees from potential retaliation by punishing employers through compensatory damages.

See full Article.

Study: Outsourcing Boosts Compliance, Internal Controls

From WebCPA:

While concern over regulatory issues has often been a barrier with regard to outsourcing financial functions, a number of companies that have outsourced those jobs indicated that they now have tighter control over governance and compliance, according to a survey from consulting giant Accenture.

See full Summary.

COSO launches SOX guidance for small biz

From WebCPA:

In an effort to aid smaller publicly traded businesses with internal controls compliance, the Committee of Sponsoring Organizations said that it would offer online guidance for internal controls assessment by the summer.

In conjunction with COSO, as well as the Advisory Committee of the Securities and Exchange Commission and the Public Company Accounting Oversight Board, Big Four firm PricewaterhouseCoopers will produce the guidance materials, which will be available for a fee. PwC partner Miles Everson will spearhead the effort.

See full Summary.

William McDonough Q&A

From WebCPA:

In just under two years at the helm of the Public Company Accounting Oversight Board, William McDonough has gone from being a respected figure in banking to being the most influential and often feared figure in accounting.

McDonough, who had had a distinguished career at First Chicago Bank and later served as president of the Federal Reserve Bank of New York, assumed the chairmanship of the PCAOB in July 2003, when the fledgling board -- created a year earlier by Congress as a result of the passage of Sarbanes-Oxley -- was in a state of disarray.

Upon assuming his new post, the no-nonsense McDonough continually stressed a mantra of looking for "tone at the top" and proceeded to administer the oversight board's mantra of tough love to auditors and public issuers alike.

See full Q&A.

SEC Sets Date for SOX Controls Roundtable

Washington (Feb. 24, 2005) - The Securities and Exchange Commission said that it would hold its previously announced roundtable on the internal controls requirements of Sarbanes-Oxley on April 13 -- affording both companies and auditors the opportunities to air their grievances on the difficulties and costs of the federal mandate.

Since the 2002 passage of the sweeping corporate reform act --Section 404 of which requires a company's executives to attest to the adequacy of its internal controls -- the guidelines have been the subject of frequent complaints from firms and auditors citing the prohibitive costs in both money and time.

The SEC is currently mulling a delay for internal controls compliance for both smaller and foreign-based companies, both of whom are required to be in compliance by July 15. After receiving a delay last year, larger companies -- those with a market cap of $700 million and higher -- began complying with the internal controls requirements in November.

WebCPA staff

Corporate Directors Institute -- Director Professionalism Certificate Course

Date: Saturday, October 22, 2005 - Sunday, October 23, 2005
City: Washington DC
Location: The Renaissance Mayflower Hotel and the hotel site.

See full Seminar Details.

Different countries are looking at their own models

Korea should develop its own code rather than insisting on uniform global standard, analysts say.

See full Article.

Corporate Governance in the Age of Eliot Spitzer

Some advice from an industry professional on how issues to moniter. See full Article.

The role of the FTSE 100 chairman

Our study shows that the FTSE chairman’s role is perceived to have undergone significant change in the past two years. Reaction to these changes among the 14 business leaders we interviewed varied from outright hostility towards the UK Combined Code to a welcome acceptance of its tenets.

Most of those we interviewed agreed that the chairman’s primary role is to focus on gaining maximum value from the board while ensuring that the company is not disadvantaged by inadequate governance. As the bridge between executives and non-executives, the chairman’s primary role is to run an effective board process, giving the CEO the space to run the company. The question of how responsibility is divided between the two in practice, however, remains an issue.

See full Press Release.

Document and Records Management key to Satisfying Regulatory Obligations

In order to adhere to the raft of current regulations and legislation, such as Sarbanes Oxley and the Companies Act 2004, businesses are required to retain corporate information. However, it is highly questionable whether many organisations actually have a clear understanding of what their obligations are to become compliant. An essential point that must be addressed is the organisation’s ability to understand what information should be retained and for how long. The penalties that companies face for not being able to discover and retrieve the correct information within requested timeframes can be severe, so it is essential that corporate information is safely retained in a format where it cannot be altered. In Butler Group’s opinion, the only effective way that this can be achieved is through the successful deployment and use of a Document and Records Management (DRM) solution.

See full Artilcle and Butler Group's Press Release.

Automated Sarbanes-Oxley Controls Assessment Now Available

Answerthink, Inc. announced the availability of an automated Sarbanes-Oxley controls assessment service that quickly and easily evaluates how effectively companies are using controls capabilities within Oracle, PeopleSoft, and other leading ERP systems. The service is designed to help companies lower the cost of financial controls related to Sarbanes-Oxley compliance, and provides detailed recommendations for how companies can further automate, strengthen, and standardize controls.

See full Press Release.

NYSE Partners with Wipro on Corporate Governance Web Site

Wipro Technologies, the global IT services division of Wipro Limited (NYSE: WIT) today visited the New York Stock Exchange to showcase the successful launch of eGovDirect.com(sm), an electronic filing platform to assist NYSE listed companies with the submission and management of their corporate compliance information.

See full Press Release.

Tesco sees up to £30m impact from IFRS

From Business World:

Tesco said the adoption of the International Financial Reporting Standards (IFRS) will impact net profit from the 2005-06 year end by between zero and £30m.

The supermarket giant said the new accounting procedures would have no impact on pre-tax cash flow, it added.

Its 2004/05 accounts, restated under IFRS, will be issued in May 2005.

Questions CCO's Most Frequently Ask About E-Mail Compliance

ZipLip CEO Kon Leong's experiences in e-mail compliance make him very aware of what chief compliance officers ask.

By John Dickinson

A few weeks ago I spent a pleasant couple of hours over lunch discussing e-mail compliance issues, and the state of e-mail and compliance in general with ZipLip CEO Kon Leong. His perspective is long and wide -- Leong has been dealing with compliance issues for a long time, first as a Wall Street IT professional, and in the past several years as founder of ZipLip, a company exclusively focused on compliance.

See full Article.

The Silver Lining In SOX

Most large public companies are in the throes of their first annual audits under the financial reporting provisions of the Sarbanes-Oxley Act (SOX). Processes have been documented, risks defined and controls put in place, yet few companies have made the fundamental changes to financial systems and processes that will enable them to comply with the law efficiently.

See full Article.

Creating Value Beyond SOX: Evolving From Compliance To Optimized Enterprise Risk Management

In the past 18 months many CFOs have been focused upon SOX compliance. As organizations complete their first SOX cycle how will they drive value creation from their compliance investments? This webcast will outline an incremental program for evolving beyond SOX to an optimized enterprise risk management state. It will also explain how the key milestones on that journey, as well as the end state, can drive value.

Date: March 8, 2005.

See full Details including to register.

Sarbanes-Oxley Workshops 302 & 404

THE ISSUE: DO YOU HAVE REPORTABLE CONTROL DEFICIENCIES?

Since the Sarbanes-Oxley Act passed in July 2002 many articles have been written and programs offered to provide guidance and interpret the new SEC and PCAOB regulations. The SOX area that is emerging as the most problematic is the issue of deciding whether a company has reportable control deficiencies under section 302 and 404 of the Act, i.e., a material weakness or significant deficiency.

See Sarbanes-Oxley Workshops 302 & 404 details.

THREE LOCATIONS:
Orlando, FL
February 24
Wyndham Palace Resort

San Francisco, CA
March 10
Hyatt Regency Burlingame

Baltimore, MD
March 31
Wyndham Baltimore Inner Harbor

Chairman Paul Volcker keynotes constitutional reform

Following on from my previous post, see following:

In remarks on February 25, 2005, to the European Union’s Accounting Regulatory Committee (ARC), Paul A Volcker, Chairman of the IASC Foundation Trustees, emphasised the progress that the International Accounting Standards Board (IASB) was making towards its objective—a common set of respected accounting standards applicable in all significant markets.

See Press Release and full Speech, both in pdf format.

Volcker Tells EU of Proposed IASCF Constitutional Reforms

The IASB, run by the Americans, and the European Union continue to have their disagreements about whether US rules should reign supreme worldwide, without question. The question about how to regulate European companies and whether there should be a flexible timetable also continues.

It appears that we are getting to an agreed conclusion.....it appears.

OAM

On Feb. 25, 2005, International Accounting Standards Committee Foundation (IASCF) Chairman Paul Volcker made a speech to the European Union's Accounting Regulatory Committee (ARC), summarizing the current status of proposed reforms to the IASCF Constitution. The constitutional reforms would affect the composition and operation of the IASCF and the International Accounting Standards Board (IASB) it oversees.

See full Article.

Related articles:
Volcker hits back at calls for IASB reform (FT subscription required)
Brussels seeks greater role in IASB decisions
EU's McCreevy attacks IASB

CBI makes last-ditch US governance plea

The debate continues about whether non-US companies should be given more time to comply with US legal compliance regulations. This is also linked with the danger that companies looking for more time will be accused of having something to hide or of not being in shape.

We must avoid reaching these clumsy conclusions in the context that international companies have different (no less appropriate) regulatory regimes, as well.

OAM

Sir Digby Jones, the director general of the CBI, will meet American financial regulators this week in a last-ditch effort to secure more time for British companies to comply with new US corporate governance rules.

The CBI delegation will meet officials from the Securities and Exchange Commission (SEC) in Washington on Wednesday to discuss the impact of the most complex and expensive provisions of the US Sarbanes-Oxley legislation on accounting and corporate governance.

See full Article

Related links:
Donaldson may bend a little on Sarbanes-Oxley

Investors, the Stock Market, and Sarbanes-Oxley's New Section 404 Requirements

HBS: Corporate Governance: Is Business Management a Profession?

by Rakesh Khurana, Nitin Nohria, and Daniel Penrice

Repeated and, as of this writing, ongoing revelations of corporate wrongdoing over the past two years have eroded public trust in business institutions and executives to levels not seen in decades. A recent Gallup poll indicates that Americans now have no more trust in business leaders than they do in Washington politicians.1 Fairly or not, people have become willing to believe that executives, as a class, are greedy and dishonest.

See full Article.

Putting Sarbanes-Oxley To Work For You

Arming boards with the knowledge and training to do a good job is the number one thing companies can do to improve board performance

By Jeffrey Rodek

Recently, I spoke at a conference for CEOs. The topic was the effect of recent legislation on corporate boards. Translation: “how Sarbanes-Oxley is going to suck the life out of your company.” At least that was the feeling I got from some of the participants.

See full Article.

The X Factors For Global Leaders

The word “globalization” conjures up strong emotions when it comes to the issue of labor, even at the executive level. High on the list of the negative perspectives is the fear in the United States of jobs lost to offshore locations.

However, there are positive implications to globalization as well, such as the creation of international opportunities for Americans and others Westerners willing to take risks and seize those opportunities. Ultimately, globalization is just a word, and what matters are individuals. There’s a significant personnel investment required to send a leader offshore, and organizations need to choose wisely for business initiatives to succeed.

To that end, we have identified a series of X factors to help differentiate leaders who will succeed from those who will fail.

See full Article, in pdf format.

SIA supports the benefits of flexible reporting

Almost two years after the ASX Corporate Governance Council issued its corporate governance Principles and Recommendations, the Implementation Review Group published its second report on the implementation of the Council’s Principles and Recommendations.

The main observation in the IRG’s second report is that the key message regarding the “if not, why not” approach must be further clarified with listed companies, particularly smaller companies.

“The Council’s flexible approach to introducing best practices for corporate governance in Australia provides the ability for large and small listed companies to apply the principles as appropriate to the nature of their business operations”, says Diane Tate, Senior Manager, Policy & Government Relations of the Securities Institute.

See full Article'>http://www.securities.edu.au/corp_article.asp?assetID=5432&contextID=Home">Article.

Preying on the fear factor

Risk is about perception. Take a recent Ernst & Young survey looking at board members of the UK's leading 500 companies, which suggests that more than 40% were more sceptical of becoming a non-executive director. This change is due to a change in perceived views of severity and likelihood.

If we had more information about other director risks, perhaps I could be scathing about these shy non-execs' misunderstanding of the facts.

See full Article.

World Economic Forum - Global Governance Report

A new report issued today by the World Economic Forum makes clear that the world’s leaders are breaking their solemn promises to tackle global problems from poverty to peace to environmental protection. The report by the Forum’s Global Governance Initiative (GGI) assesses the efforts of the world’s governments and corporations over the past year, demonstrating that the world remains far off track to achieve its most important goals. But it also shows that 2005 could be the year of change, especially if the formidable energies of private enterprise are harnessed more effectively.

Reade full Press Release and Full Report 2005.

Corporate governance rules won't stop fraud-study

Recent accounting scandals were not caused by insufficient corporate governance rules but by excessive option rewards, big ego bosses and inflated promises to shareholders, says a study published on Friday.

See full article.

Corporate Governance in the Age of Eliot Spitzer

If you are an active participant in the corporate affairs of the company for which you sit on the board, you have very little to worry about when it comes to SEC actions, or even class action lawuits. Just keep in mind that directors are custodians of the stockholders' money. They are serving to protect the stockholders, not to protect management.

These appear to be trying times for officers and directors of publicly held companies. But are they really? Many people involved on the management and directorate level with public companies are quite leery nowadays. But should those of us involved with corporate boards and corporate governance be afraid, or just cautious? In my opinion, there is no real need for concern.

See full Article.

Automation tools to get boost from Sarbanes-Oxley

Software designed to automate the process of complying with the Sarbanes-Oxley Act will be in high demand this year, a regulatory expert said Friday.

Sebastian Goodwin, president of risk management consulting company Ensurity, offered his regulatory compliance crystal ball during a session on Sarbanes-Oxley at the RSA Conference taking place here this week.

See full Article.

Deloitte issues guidance for UK companies facing challenge of new interim reporting requirements

79% of the 100 FTSE 350 companies surveyed face increase in interim reporting

Deloitte published a report revealing the impact that pending changes to corporate interim reporting will have on UK companies. The report – The half-time results: Reviewing and revising corporate interim reporting – includes guidance and model accounts to assist companies in reporting under the new requirements.

See full Press Release.

Related links:
Impact of interim reporting receives model accounts

Deloitte calls on regulators to update rules for oil & gas reserves reporting

Right now, the oil and gas companies are announcing their results and are mostly posting significant gains. Not surprising, as the prices of oil and gas remain sky high and return hurdles at the bottom. Any company in this business not making rent returns (that is greater than the norm) needs to look deeply at their performance.

What we have also seen, however, is that companies that need to report in various jurisdictions, are making significant adjustments. The one that hits the headlines is the varying ways that regulators are measuring proven and probable reserves. To the extent that Shell, BP and others recently announced a reserves replacement rate of below 100% in their US reporting (that is that their new additions to oil and gas reserves was below than consuption or sale in the same period). Whereas, under UK regulations, their reserves replacement rate was above 100%, that is, they added to their total reserves.

This does not make sense and it would be easier to judge management performance, including transparency in reserves and other numbers, if we had a more unified approach.

Deloitte rightly calls for regulators to get together on their definitions.

OAM

Deloitte is urging regulators around the world to update reporting requirements for oil and gas reserves to expand the scope of mandatory disclosures in annual reports and financial statements. The recommendations published today in a report by Deloitte’s global oil & gas group seek to work with the industry to improve information available to markets and restore investor confidence in reserves reporting.

See full Press Release.

Related links:
Impact of interim reporting receives model accounts, Deloitte

FAC commits to supporting developing nations

The International Federation of Accountants (IFAC), the global organization for the accountancy profession representing 163 accountancy organizations with more than 2.5 million accountants in public practice, education, government service, industry and commerce, convened a meeting in London this week with the chief executives of 30 member bodies and regional accountancy organizations. Representatives of the World Bank and the United Nations Conference on Trade and Development (UNCTAD) also attended the meeting. The group discussed a global agenda for enhancing the accountancy profession's contributions to economic growth and development.

Participants agreed that the international profession should strengthen accountancy in developing nations, address professional responsibility in financial reporting, clarify the role of accountants in corporate governance, provide support and guidance for professional accountants in business, and focus on supporting small and medium enterprises and practices.

See full Press Release.

Related links:
IFAC commits to supporting developing nations

ICAEW urges firms to get the pro's in

They would say that wouldn't they!

Not surprisingly, the accounting association makes a statement of the obvious and then an opinion. They say that big business (what happened to small business?) must raise standards (this is the obvious) and employ professional accountants as Finance Directors.

While understanding the companies (big and small, listed and private) need professional and ethical accounting professionals, if they were to say that the Controller needs to be an accountant, I may not have commented.

Howerver, saying that Finance Directors or Chief Financial Officers should ideally be professional accountants is an opinion and only that. And an erroneous opinion at that.

While Finance Directors or Chief Financial Officers need to have a solid knowledge of the financial and reporting aspects of their job specifications, just relying on their being able to 'balance the books' ethically limits ethics and 'doing the right thing' to the numbers and to simply following the rules in reporting terms.

Ethics and the right behaviour is that and a lot more. Purely books people have too restrictive a focus and, judging by the fact that in recent years we have seen numerous experts in managing the books trip up, clearly this is not enough!

OAM

See full ICAEW Comments.

Ernst & Young Sarbanes Oxley 404 Checklist

From Ernst & Young:

Many companies have begun initiatives to certify that the financial processes impacting financial reporting in their companies are suitable and properly controlled, and thus meet the requirements of Sarbanes-Oxley. A number of these processes are in the treasury area.

Largely as a result of the treasury function often being an area that is not well connected or understood throughout a company, we are hearing from many Treasurers that they are receiving little scoping guidance from their company's 404 project leaders. This appears to be the case whether the initiatives are being undertaken internally or through the use of external advisors. Added to this, is the fact that since most treasuries are thinly staffed, they are facing the extra pressure of not having the resources to undertake these projects in the required time frame without other vital treasury activities suffering.
We are also hearing from some Treasurers that due to the time and effort involved in this process, they anticipate moving beyond the pure control aspects of this initiative and are using it as an opportunity to improve their treasury processes.

We have put together a high-level process activity checklist to assist Treasurers in scoping out the treasury aspects of the Company's 404 process requirements. If you have any further questions or resource requirement issues, please feel free to contact any of the Treasury Advisory staff listed on this website.

See full Checklist in pdf format.

Directors to Address Critical Corporate Governance Issues

The John H. Sykes College of Business at The University of Tampa will once again host board of directors from across the U.S. at the Florida Directors' Institute on March 18.

See Details and the Directors' Institute site.

Imposing Corporate Governance Reform: The SEC Takes Action

The partial settlement announced on November 13, 2003 between the Securities and Exchange Commission and Putnam Investment Management LLC highlights a significant trend in recent enforcement actions: the imposition of substantial corporate governance reforms and related independent monitoring of these required changes. While criticized by state officials in New York and Massachusetts as not being tough enough, the Putnam settlement details sweeping, and for the most part, voluntary changes to its boardroom in terms of composition, process and procedure. The SEC emphasized these voluntary remedial efforts and undertakings as part of its decision to accept Putnam's offer of settlement. Understanding these specific reforms provides insight into what non-monetary terms the SEC may expect or require in the current regulatory environment.

See full Article.

Role of Documents in Highly Effective Business Processes

Along with growing the top line, most medium and large organizations in the U.S. see their top challenges as cutting costs and increasing profits, yet few assess and manage documents, the lifeblood of business processes and a key source of costs. Information flows throughout organizations in the form of documents, whether in electronic or paper form.

Driving the growing importance of documents are the demands of regulatory compliance, the need to communicate with customers, suppliers and employees in multiple media, and the role of documents in achieving ROI for business process solution investments (e.g. enterprise resource planning (ERP), customer relationship management (CRM), content management, and collaborative applications).

See full Report in pdf format.

Concerns over PCAOB rules

The main concern that Commissioner Glassman refers to is that Auditors appear to be being given more and more responsibility and a more central role in companies' control network. The new legislation, rules and procedures issued all go down this road.

This appeared to be the case, mainly because of a lack of understanding of their actual role, when failings happened (Enron, MCI, Parmalat, etc.). While it is possible, I will not say likely, that the auditors in these cases were not, as a minimum, thorough in doing their jobs, in some cases, the auditors seemed to have taken the brunt of the blame.

This is dangerous. Auditors have never been policemen in the forensic sense, unless engaged for that purpose. Management were always supposed to be responsible for the activities of their companies and for the statements made and produced.

We should not put into place rules or make statements that water down the full responsibility of management for their companies. Auditors can make the appropriate tests and ask the appropriate questions but management are the ones that should know their companies and should be getting on with it.

If things are not being done right, we need to get management ethics right! Just blaming the auditors does not solve the problem.

OAM

See Financial Times article:
By Andrew Parker in New York
Published: February 18 2005 02:00 Last updated: February 18 2005 02:00

An initiative to improve financial reporting by companies appears to have wrongly become focused on work by auditors, a member of the Securities and Exchange Commission has claimed.
Cynthia Glassman, one of the five commissioners at the SEC, expressed concern at the impact of rules written by the Public Company Accounting Oversight Board, the accounting regulator created after the Enron and WorldCom scandals.

Read full Article (registration required).

Related links:
Cynthia A. Glassman Biography

Boletín Corporate Governance Confecámaras Número 58

En formato pdf.

Statement of Principles-Member Activism

This is a Statement of Principles for members of the Canadian Coalition for Good Governance and sets out best practices for members in relation to their responsibilities in respect of a company in which the members invest.

See full Report, in pdf format.

SOXGAP - Sarbanes Oxley (SOX) Group of Auditors and Professionals

The Sarbanes Oxley Group is the only global provider of SOXBase and SOXPro level training and certification programs for Auditors and Professionals involved in (or looking to get involved in) SOX-related compliance projects.

Visit the SoxGap web site for full information.

Sarbanes-Oxley Compliance Toolkit

Understanding and insuring (sic) compliance with the Sarbanes-Oxley Act can be a formidable undertaking. It is a complex piece of legislation, and one which demands a serious and planned approach.

See full Description.

IMlogic Releases IM Manager for Instant Messaging Compliance, and more stories

By WS&T Staff Wall Street & Technology

IMlogic, a Waltham, Mass.-based instant messaging management software provider, has released IM Manager 7.0, an instant messaging management, compliance and security solution.

See full Article.

Viewpoint: Financial Sector Needs To Take Compliance Into Its Own Hands

By Maria Santos Courtesy of Wall Street & Technology

The Issue Defined: As the Securities and Exchange Commission steps up its efforts to regulate the industry and protect investors, financial institutions must take proactive measures to comply with current and possible future rules before the SEC takes action against them.

See full Article.

20 consejos para el nuevo gerente de una PYME

Nuestra larga trayectoria profesional, durante doce años en la empresa privada y desde entonces en el mundo de la consultoría, nos permite disponer de una amplia serie de experiencias de todo tipo, vividas en primera persona. De entre ellas, queremos sacar hoy una serie de consejos que sean válidos para aquellos profesionales que son contratados o designados para dirigir empresas PYMES.

Con independencia de que cada empresa es un mundo diferente y de que existen bastantes PYMES que tienen un tamaño, una estructura y organización que escapan de los comentarios que vamos a hacer, sí podemos generalizar sobre el resto. Las PYMES tienen sus propias características que las diferencian con claridad de las grandes empresas.

Ver Artículo completo.

La CNMV somete a consulta el proyecto de circular sobre informe anual de gobierno corporativo de las Cajas de Ahorro

La Comisión Nacional del Mercado de Valores (CNMV) ha puesto a consulta en su página de Internet el proyecto de “Circular sobre el informe anual de Gobierno Corporativo y otra información de las Cajas de Ahorros que emitan valores admitidos a negociación en mercados oficiales de valores”.

El proyecto se basa en la habilitación que la Orden Ministerial ECO/354/2004 de 17 de febrero dio a la CNMV para el desarrollo del contenido y la estructura del informe anual de Gobierno Corporativo de las cajas, así como para determinar el contenido de su página web. El texto ha sido fruto de un largo proceso de diálogo entre la CNMV y la Confederación Española de Cajas de Ahorro (CECA).

Los interesados podrán enviar sus comentarios y sugerencias en relación con el proyecto de circular desde hoy hasta el 1 de marzo inclusive.

El documento estará a disposición del público en la página web de la CNMV, en la dirección http://www.cnmv.es/cnmvdia/decetes/documentos.htm

14 de febrero de 2005

Public consultation of the proposed revisions to the Code of Corporate Governance

1. The Council on Corporate Disclosure and Governance (“CCDG”) is seeking public feedback on the proposed revisions to the Code of Corporate Governance (the “Code”).

Background

2. Following the CCDG’s media release dated 10 May 2004, the CCDG has set up a Review Committee comprising members and non-members of the CCDG to consider proposed revisions to the Code. The Review Committee has completed its review and submitted its preliminary recommendations to the CCDG.

See full Article.

S-OX Compliance: Short-term Goals — Long-term Value

For over a decade, finance groups have strived to transform their role from independent scorekeepers to business partners who are focused on developing top-line approaches to corporate success. With the passage of the Sarbanes-Oxley Act of 2002 (the Act), some CFOs fear compliance will minimize Finance’s role and overshadow the value the group can bring to the organization.

See full Article.

Sarbanes-Oxley database compliance

Over the last few years, numerous prominent and headline-grabbing accounting scandals have taken place in major corporations. As a result, the Sarbanes-Oxley Act (SOX) was designed in the hopes of reducing fraud and conflicts of interests, while increasing financial transparency and public confidence in the markets. SOX defines a framework that makes it harder for executives to claim that they were unaware if information is compromised. Under the act, companies must maintain proven auditing practices and assure integrity and timeliness of data.

See full Article.

Corporate Directors Forum Event - Successful Acquisitions: Director's Role

Corporate Directors Forum 2005 Director of the Year

Corporate Directors Forum Governance Documents

Corporate Governance Committee of the Corporate Directors Forum (“CDF”) has collected several documents applicable to the topic of Corporate Governance. CDF has placed these documents on its website, to be available for the general information of CDF members.

The information, suggestions and comments made in these documents are for informational purposes only, and are not intended as legal advice. You should consult with your own attorneys and professional advisors concerning these matters. The law is constantly changing, and these documents may not be complete and up to date. Each company’s situation is different, and these documents may not be applicable to your particular company’s needs. The law firm of Gray Cary has assisted with the preparation of some of these documents. Neither CDF nor Gray Cary shall have any liability arising with respect to these documents.

See various Documents.

Upcoming Carver Policy Governance Training Events

See varioius Events through to September, 2005.

protiviti Risk Ranking Assessment tool

This risk assessment tool is designed to help identify and document critical business processes and the internal controls within each process. In an effort to comply with Section 404 of the Sarbanes-Oxley Act of 2002, this risk assessment will help to rank and prioritize processes. Combined with facilitated management meetings, this approach can help gain company-wide consensus by including key process owners in risk and controls analysis.

This assessment tool includes:

Instructions
A sample risk universe from which management selects the 15 most critical business processes (this should be customized for your own business processes and industry)
A sample risk map explaining the concept of plotting risks according to 1) Importance to Business/Financial Performance and 2) Likelihood of Process/Control Weakness
A blank risk map for managers to use for ranking
After results are gathered from the participants, you should facilitate a group meeting to review and discuss the results and gain consensus on a final process list and ranking.

See checklist in pdf format.

protiviti Sarbanes-Oxley Section 404 Guide

Guide to the Sarbanes-Oxley Act: Internal Control Reporting Requirements Frequently Asked Questions Regarding Section 404

The SEC has issued its final rules on Section 404 of the Sarbanes-Oxley Act, which requires management to file an internal control report with its annual report. The Commission made a number of significant changes from its originally proposed rules, including new deadlines that extend the period for public companies to achieve 404 compliance, and revised quarterly internal control assessment and reporting standards.

In response to the SEC’s rulings as well as feedback from hundreds of clients, colleagues and industry professionals, Protiviti has updated its well-received Guide to the Sarbanes-Oxley Act: Internal Control Reporting Requirements. The new edition contains 40 pages of new material, including 47 additional frequently asked questions and updates of many other questions reflecting the SEC’s final rules pertaining to Section 404.


See Report, in pdf format.

The 404 Monster

From Bank Director Magazine, 1st Quarter, 2005:

Many institutions have been frustrated with the time and effort required to deal with Sarbanes-Oxley’s Section 404. The good news, hopefully, is that things will be easier after this first year.

OAM

The board of Umpqua Holdings Corp. in Portland, Oregon, has worked closely with management over the past decade to craft a retail-oriented strategy that has transformed $5 billion Umpqua from a small rural bank into the state’s largest independent. Lately, though, directors have been devoting much of their time to meeting the demanding new reporting requirements laid out in Section 404 of the Sarbanes-Oxley Act, the meat of which comes due this reporting season.

See full article.

First Annual Bank Director Board Performance Awards

Three stellar banks are commended for their performances in the categories of governance, new strategic initiative, and courage under fire in Bank Director's inaugural awards program.

At the onset of its fifteenth year of publication, Bank Director is proud to announce its first annual Board Performance Awards 2004.

See Summary.

Profiles in Director Courage, or not

From Bank Director Magazine, 1st Quarter, 2005:

Brief article from William Seidman who is always worth the time...

See full article.

Transatlantic Differences, by Directors Who’ve Been Both Places

From Corporate Board Member magazine, March/April, 2005:

Boards differ fundamentally on either side of the Atlantic, most clearly over the issue of the combined roles of the chairman and CEO. I believe these should be separated, as the skills required are different and the functions they perform are different. The chairman runs the board; the CEO runs the company. The chairman has to set the tone at the board, to make sure that the information flow is good, and to know enough about the company to know when to worry. There has to be a supportive relationship with the CEO, but not so close that if it ever comes to it he can’t do the difficult but sometimes necessary job of changing the chief executive.

See full article.

Race to Stay Ahead of the Regulators in Europe

From Corporate Board Member magazine, March/April, 2005:

To see what a big deal corporate governance has become in Europe, read the recent public utterances of some of the Continent’s biggest companies. Not the best of the biggest, but the worst—the most famous corporate miscreants. You can start with Vivendi Universal, which became notorious for the compensation lavished on its colorful chairman and chief executive Jean-Marie Messier before he found himself embroiled in allegations of fraud and stock manipulation in 2002. “Vivendi Universal applies the best international practices in corporate governance,” the Paris-based entertainment company claims on its website. Then Vivendi goes on to detail its recent adoption of a new charter enshrining specific good-governance practices, as well as its establishment of a board-level committee to make sure they get implemented.

See full article.

A Report Card—On You!

From Corporate Board Member magazine, March/April, 2005:

It’s no secret that more and more people are looking over directors’ shoulders to see how they’re doing their job—securities analysts, stock exchanges, regulators, legislators, your directors’ and officers’ liability insurer, plaintiffs’ attorneys, institutional shareholders, and, if you’re on a U.S. board, our old friend Eliot Spitzer. And now there’s another person poised to grade your work: the director sitting next to you in board meetings.

See full article.

Two-Way Learning Curve for Transatlantic Directors

From Corporate Board Member magazine, March/April, 2005:

Boards are developing an increasingly transatlantic flavor as more and more companies add directors from across the pond to help them map out international business strategies, inform them about foreign suppliers and customers, and—perhaps most urgent lately—keep them up to speed on new compliance regulations. “We’re seeing a lot of demand for people who can bring a European perspective to an American board and vice versa,” says Ted Jadick, co-chairman of the worldwide board practice at the search firm Heidrick & Struggles. Data compiled by Corporate Board Member in 2004 show that nearly 370 directors sit on boards on both sides of the Atlantic.

See full article.

Don’t Like U.S. Rules and Regulations? Delist

From Corporate Board Member magazine, March/April, 2005:

That steady beat of the tom-toms you’re hearing might just be the sound of heads banging on boardroom walls. Directors of European companies that trade on U.S. exchanges are almost apoplectic over the imminent implementation of Rule 404 of the Sarbanes-Oxley reform act, which requires CEOs and CFOs to certify that their companies’ internal controls are accurate. What really irks European companies is having to abide by a law they think was enacted much too quickly, requires a lot of expensive paperwork, and fans America’s lust for litigation.

See full article.

“Chilling” (What Directors Think of the Enron/Worldcom Settlements)

From Corporate Board Member magazine, March/April, 2005:

The news that 10 former directors of WorldCom (now MCI) and another 10 from Enron had agreed to pay a total of $31 million out of their own pockets to settle lawsuits jolted board members everywhere. The WorldCom deal unraveled in early February after a judge ruled that the settlements would increase what other defendants might have to pay. But that has done little to calm the fears of directors who had always believed that their insurance would cover them against any legal judgment. Statistics supported that faith (see “Worried About Shareholder Suits? Fuhgedaboudit,”which we ran a year ago).

See full Article.

Board Insights 2004 - What Europe's Board Directors Think

Board Insights 2004: What Europe’s Directors Think is a survey of
company directors throughout Europe conducted by Corporate
Board Member Europe in association with The Economist Group.
The purpose of the research is to gather data about the challenges
corporate boards face as they begin operating in a post-reform
environment. The questions were designed to tap into directors’
perceptions about their risk, liability, current board practices, and
needs for the future. Two corporate partners, Clifford Chance LLP
and Heidrick & Struggles International, co-sponsored the research.

See full Survey.

Governance Conferences, Seminars and Other Events

See Events to June, 2005.

The 'Very Public' Public Company Director

As long as image management does not take over from improvements of substance...

See full article.

2005 Annual Corporate Governance Conference: Board-Shareholder Communications

Conference in October 23, 2005 in Washington DC.

They are not currently taking registrations for the 2005 Annual Conference, but we do encourage those planning on attending to go ahead and make their hotel reservations under the NACD block at The Renaissance Mayflower Hotel, as last year the room block sold out far before the reservation cut-off date. This year's reservation cut-off date is September 30th.

See details.

Director Finance: What Every Director Should Know

Conference April 15, 2005 in Arizona

Walk away from this program with an understanding of financials from the BOARD's perspective and a clear idea of how to detect financials that are misleading or worse yet, fraudulent. Even if you only have a basic understanding of balance sheets and income statements, you will end the day feeling like a pro.

The full-day course explains the underlying meaning and purpose of corporate finances, as well as providing the skills to detect numerical tricks. Special attention is given to off balance sheet transactions, special purpose entities and other partnerships. You'll also learn what questions to ask about an audit, how to tell if that impressive accounting firm is doing a good job, how to define the role of the audit committee and the board, and how to recognize the red flags of unethical management, stressed management, fraud, and ineffective auditors.

See details.

PIRC challenges findings of Deloitte & touche report for DTI

The recent publication of remuneration advisers, Deloitte & Touche’s report1 for the DTI finds that there is compliance with the Directors’ Remuneration Report Regulations.

See full Press Release, in pdf format.

The Information Security Forum - The Standard of Good Practice for Information Security.

The Standard of Good Practice for Information Security is designed to help any organisation, irrespective of market sector, size or structure, keep the business risks associated with its information systems within acceptable limits. It is a major tool in improving the quality and efficiency of security controls applied by an organisation.

The Standard is based on over 16 years and US $75 million of investment in practical research and draws on the knowledge and experiences of the Information Security Forum's global members as well as building on other standards such as ISO 17799 and COBIT.

See full Summary and to obtain a free copy.

FRC Revised Operating Procedures for Public Comment

Financial Reporting Review Panel Publishes Revised Operating Procedures for Public Comment

The Financial Reporting Review Panel (‘the Panel’) today published a draft set of Operating Procedures (‘Procedures’) for public consultation.

The Procedures are published to inform preparers and users of accounts of the process that the Panel will follow in handling cases. There is no change in substance to the detailed operating procedures that the Panel intends applying to its consideration of accounts but these are now extended to include its wider remit. The Panel will continue to operate, as far as possible, by consensus with those whose reports it monitors and hopes that it may continue to rely on their voluntary co-operation.

The Procedures were last amended in October 2003 to allow the Panel to review annual accounts proactively. The draft Procedures published today are revised to reflect the new powers and responsibilities given to the Panel under provisions of the Companies (Audit, Investigations and Community Enterprise) Act 2004 which are to take effect from 6 April 2005

See full Press Release and the full Operating Procedures.

Spain's Sacyr scraps plan to take BBVA stake

Kadoom has it exactly right in their comment (y en Español) of the Sacyr moves with regards to BBVA.

This Board took the market by surprise with their political manouvres and showed complete disdain for keeping the market (and their shareholders) informed about what they were trying to do.

The next annual general meeting requires some resolutions that allows shareholders to remove these Directors and to appoint professional alternatives.

Let us see whether the system in Spain allows this.

OAM

Terra, ¿Consejeros independientes?

La Asociación de Accionistas minoritarios de Terra, Accter.com anunció durante el día de ayer la presentación de una denuncia en la CNMV contra los consejeros independientes de Terra Lluís Bassat, Luis Badía, Alfonso Merry y Francisco Moreno.

Estos consejeros fueron los protagonistas de la última reunión del Consejo de la compañía al aprobar los planes de fusión por absorción con Telefónica. Y lo fueron, debido a que el resto de consejeros (nombrados por Telefónica) estaban imposibilitados legalmente a votar en un caso como éste.

Ver Artículo.

IFRS News supplement - February 2005

This is the second in a series of IFRS News supplements assessing the impact of recent changes in IFRS that are relevant to existing preparers. This edition highlights the key changes made to IAS 32 and IAS 39.

See supplement.

IFRS News - February 2005 issue

It is tempting for companies contemplating the adoption of IFRS – formerly known as International Accounting Standards (IAS) – to view the change simply as an accounting exercise, something chief financial officers and their staff can do in their spare time. After all, as another company told us: ‘All we have to do is change the numbers.’ But this assumption is dangerous. IFRS conversion is a change in primary GAAP, which means that everyone in the organisation must learn a new
language, a new way of working.

The whole basis of reporting to the market will be different. For many
companies, this will mean fundamental changes – changes that can ripple right across their business operations from investor relations to everyday procedures, changes that can affect the viability of some products and even the reported profitability of the business itself.

See full News.

Making the change to IFRS

It is tempting for companies contemplating the adoption of IFRS – formerly known as International Accounting Standards (IAS) – to view the change simply as an accounting exercise, something chief financial officers and their staff can do in their spare time. After all, as another company told us: ‘All we have to do is change the numbers.’ But this assumption is dangerous. IFRS conversion is a change in primary GAAP, which means that everyone in the organisation must learn a new language, a new way of working. The whole basis of reporting to the market will be different. For many companies, this will mean fundamental changes – changes that can ripple right across their business operations from investor relations to everyday procedures, changes that can affect the viability of some products and even the reported profitability of the business itself.

See PWC full
Report.

Sarbanes Oxley boosts Dicom

The document scanning provider's chief executive, Arnold von Buren, said that companies making electronic archives and records of transaction to deal with the US corporate governance legislation had helped to increase first half sales by 13%.

'People have to keep records and people have to access those records,' von Buren told The Times.

Line56.com: Portal Governance

A Line56 survey estimated that organizations plan to deploy an average of 120 Web applications each year. These applications consist of everything from a simple display from an enterprise database to complex business process applications.

The ability to provide a simple, personalized user interface to many of these applications and reduce development costs by sharing web services have been the promise of the enterprise portal.

Many are finding however, even portal deployments used to consolidate applications and web sites can contribute to complexity rather than reduce it. To complicate matters further, some organizations have deployed multiple portals for various requirements without clear direction for how they relate to one another. Gartner reports that many enterprises "find themselves dealing with 'a jungle' of multiple portals that compete for the same resources and audiences and, in some cases, prevent each other from achieving success."

See full Article.

KPMG: Código de Buen Gobierno

New PIRC Guidelines issued today

PIRC’s new Shareholder Voting Guidelines 2005, published today reflect the next stage in corporate governance.

“Up to now the issue has been whether companies comply or not. Whilst compliance with best practice remains a key component of corporate accountability, the emphasis today is now firmly on substance and understanding of governance arrangements in practice. This will require transparency and mature dialogue.” says PIRC’s MD, Alan MacDougall.

“With the publication of our shareholder voting guidelines PIRC seeks to lead the market, addressing weaknesses in market practices and the Combined Code,” said MacDougall. “They provide consistency and fairness for our analysis of companies and transparency for clients as to the basis of our voting recommendations. Our goal is to raise standards across the whole market and our Guidelines are key to this task”.

See full Press Release, in pdf format.

S-OX Compliance: Short-term Goals — Long-term Value

By Anne Marchetti, Mike Scanlon, John Krieger, Gerald Walsh

For over a decade, finance groups have strived to transform their role from independent scorekeepers to business partners who are focused on developing top-line approaches to corporate success. With the passage of the Sarbanes-Oxley Act of 2002 (the Act), some CFOs fear compliance will minimize Finance’s role and overshadow the value the group can bring to the organization.

Good governance and adding value are not diametrically opposed goals. They can be complementary objectives that further the evolution of Finance as a value-added business partner if senior management recognizes the true impact of strengthening internal controls and financial management processes.

See full Article.

Questions that may be asked at 2005 shareholders' meetings

The annual meeting provides shareholders an opportunity to ask questions of management and the board on the company’s performance and provides management an opportunity to present its views.
The purpose of this document is to assist management of public companies in preparing for the annual meeting and to be able to provide informed responses to shareholder questions. This document contains examples of questions that might be asked, based on those asked at annual meetings in recent years, and considering current events. The questions are organized by major category. New and significantly revised questions in this year’s edition are presented in italics, and are included along with those from previous years that we believe may be of continuing interest.

See full Document, in pdf format.

Donaldson may bend a little on Sarbanes-Oxley

The regulatory authorities are responsive to the intensive work required and cost incurred in compliance all at once. Some reasonable time to reach the legislative requirements is the right and rational thing to do.

And this does NOT mean that companies that take advantage of the delays are in some way suspect in their controls.

We are requiring big changes to confirm to new rules and this means that the world needs time to adjust.

The Financial Times has written variously about this regulatory timing flexibility.

OAM

The head of the Securities and Exchange Commission has signalled he will respond to complaints by business about the soaring costs of the Sarbanes-Oxley governance law, but is warning that any concessions will be limited.

William Donaldson, SEC chairman, wants to reduce the costs of compliance with rules that require companies to report on internal controls against fraud.

See full Article.

Related articles:
SEC mulls foreigner compliance delay
SEC considers extending deadline for foreign groups

SEC Announces Roundtable on Internal Control Reporting Requirements

The Securities and Exchange Commission announced today that it will host a roundtable discussion this spring regarding registrants’ and accounting firms’ experiences implementing the new reporting requirements under Section 404 of the Sarbanes-Oxley Act of 2002. The roundtable, which will include representatives of the Public Company Accounting Oversight Board (PCAOB), issuers, auditors, investors and other interested parties, is tentatively scheduled for April 2005.

See full Press Release.

Belgian Corporate Governance Code Takes Effect

The new Belgian Corporate Governance Code entered into force this month. In response to companies' concerns about measuring compliance, the drafters created a three-part Code that includes principles, provisions and guidelines.

The Code was drafted by the Belgian Corporate Governance Committee. The committee was created Jan. 22, 2004, by the Banking, Finance and Insurance Commission (BFIC), the Federation of Enterprises in Belgium and Euronext Brussels.

The past year has proven to be a busy and productive one for the group. The committee published a draft Code on June 18, which was open to public comments until Sept. 15. The final version of the Code was published Dec. 9 and entered into force on Jan. 1.

See full Article.

Tax policy and corporate governance increasingly connected

Tax policy and corporate governance increasingly connected, says major investor

Investors are increasingly concerned how companies are dealing with mounting tax regulations, according to a new report UK-based fund managers Henderson Global Investors published a report this week summarising the findings from a survey of the UK’s FTSE350 companies on their respective tax policies.

“Tax, risk and corporate governance” attempts to gauge the preparedness of companies to deal with increasing tax scrutiny by governments as well as the wider public.

The Henderson report points out that recent announcements by UK’s Chancellor of the Exchequer, Gordon Brown, to crack down on corporate tax avoidance are a clear indication of the spotlight on company tax policies.

Read full Article.

Society of Corporate Secretaries & Governance Professionals 2005 Event Calendar

Society of Corporate Secretaries 2005 National Conference

Society of Corporate Secretaries & Governance Professionals' 2005 59th. National Conference is to be held on June 22-26, 2005 at The Westin Century Plaza Hotel and Spa, in Los Angeles.

The Title of the 2005 National Conference is "New Beginnings - New Opportunities".

See full Details.

Also put in your calendar:

June 28-July 2, 2006 National Conference
--at The Loews Philadelphia Hotel, in Philadelphia.

June 27-July 1, 2007 National Conference
--at The Broadmoor, in Colorado Springs, Colorado.

Governance Conference Focuses on Investor Activism

Investor Responsibility Research Center's (IRRC) Governance Conference Focuses on Investor Activism, as Harrigan Loses Calpers’ Post

OUSTER OF ACTIVIST PRESIDENT OF CALPERS VIEWED BY PANELISTS AS CORPORATE ‘PUSH BACK’. Institutional investors are viewing the ouster this week of Calpers’ President Sean Harrigan as more “push back” from the corporate sector, which is unhappy with the power that shareholders have gained post-Enron. Harrigan, a fervent shareholder activist and a Democrat, who also headed the regional division of the United Food and Commercial Workers Union (UFCWU) while he was at Calpers, was voted out of office on December 1 by the California Personnel Board. Harrigan was appointed to that five-member board by former Gov. Gray Davis, a Democrat.

He was selected to represent the personnel board, which has one of the 13 directorships at Calpers, in 2000, and was subsequently elected Calpers’ president in February 2003. Ron Alvarado, a Republican, will replace Harrigan in that post on January 1. Alvarado's career has included stints as vice president of a real estate development company and as a former official in California’s consumer services agency and health and welfare agency. He also has worked in the federal government.

See full Article.

The case for CSR: A response to the Economist

Economist Intelligence Unit's "The Importance of Corporate Responsibility"

See Reply in pdf format.

Conference-SF: Corporate Governance 2005 - Actions & Impact

Location: San Francisco
Date: 2005/02/25

Notes: For investment managers, pension funds, compliance officers, proxy administrators, corporate secretaries, and governance professionals, IRRC's 2005 event brings together the resources you will need to have a successful proxy season.

Expect to hear discussions on the issues of mutual fund disclosure, SEC regulations, the labor agenda for 2005, proxy "access," and Doug Cogan's report titled "Unexamined Risk: How Mutual Funds Vote on Global Warming Shareholder Resolutions."

Sponsors: IRRC Website: www.irrc.com/conferenceonference/conf_prev05.html

Conference-NY: Corporate Governance 2005 - Actions & Impact

Location: New York City
Date: 02/18/2005
Notes: For investment managers, pension funds, compliance officers, proxy administrators, corporate secretaries, and governance professionals, IRRC's 2005 event brings together the resources you will need to have a successful proxy season.

Expect to hear discussions on the issues of mutual fund disclosure, SEC regulations, the labor agenda for 2005, proxy "access," and Doug Cogan's report titled "Unexamined Risk: How Mutual Funds Vote on Global Warming Shareholder Resolutions."

Sponsors: IRRC Website: www.irrc.com/conferenceonference/conf_prev05.html

It's Time to Take Your SOX Off

To protect shareholder value, companies must link risk management with strategic planning and avoid overreacting to regulatory compliance mandates.

Here’s a fact that bucks conventional wisdom: More shareholder value has been wiped out in the past five years as a result of mismanagement and bad execution of strategy than was lost because of all of the recent compliance scandals combined. This is a key finding of a recent Booz Allen Hamilton survey and analysis of the performance of 1,200 firms with market capitalizations of more than $1 billion for the five-year period from 1999 through 2003.

See full Article.

Conference: Measuring & Rewarding Good Corporate Governance

Today's investor wants to invest in companies that demonstrate strong corporate governance and good corporate citizenship, and many companies are striving to be leaders in governance and corporate social responsibility (CSR). There are a number of ways to evaluate a company--in addition to screening out stock of selected companies, shareholder advocacy and pressing companies to make changes are very much in the news. Finally, proxy services and corporate governance ratings for companies are gaining currency.

See more details on this Conference.

Observatorio de gobierno corporativo de las grandes sociedades cotizadas en el mercado de valores español (IBEX-35)

En septiembre de 2003, el Patronato de la Fundación de Estudios Financieros aprobó la creación del Observatorio de Gobierno Corporativo y Transparencia Informativa con el objetivo de celebrar, con carácter anual, un encuentro entre los Presidentes, Consejeros Delegados, Consejeros y Secretarios de Consejos de Administración de Empresas Cotizadas en Bolsa para debatir el estado de situación del Buen Gobierno de las empresas.

Como material de trabajo del Observatorio, la Fundación decidió desarrollar unos informes de trabajo sobre Buen Gobierno y Transparencia Informativa en colaboración con dos grupos de investigadores de las Universidades de Oviedo y Alicante, encabezados por los Profesores Silvia Gómez Ansón y Juan Carlos Gómez Sala, respectivamente.

Estos informes cuentan ya con la experiencia de la edición del pasado año, y en ellos han participado, a lo largo de doce meses de actividad, más de 20 profesionales del mundo académico y empresarial.

Ver Informe completo, en formato pdf.

Corporate Social Responsibility Conference

Intertek 5th Annual Corporate Social Responsibility Conference

March 10-11, 2005 New York, NY

"Partnering for Progress, Sharing Ideas and Best Practices: Implementing CSR in Global Supply Chains"

Designed specifically for policy-makers and practitioners, INTERTEK’s 5th Annual Social Responsibility Conference provides an intimate forum for CSR leaders to gain insight and understanding and interact with peers from a wide range of sectors. Plenary sessions, panel discussions, small-group workshops, and facilitated roundtable discussions foster a dynamic exchange of ideas, best practices and innovative solutions. During the conference and side events, participants will gain insights they can apply to their own businesses, and will have ample opportunity to build relationships with other CSR leaders.

For more information, please contact: conferenceinfo@intertek.com.

Business Case for Corporate Citizenship

Arthur D. Little report brought to us by CSRwire.

See Report in pdf format.

PR News Announces Winners of Corporate Responsibility Awards

The winners of this year's Corporate Social Responsibility Awards (CSR) defied the odds and have overcome a year of intensive corporate scrutiny by demonstrating that goodwill, philanthropy and employee commitment to "do good" can go a long way towards making an impact on a community and on a company's bottom line.

The CSR awards, presented by the leading industry publication PR News, is one of the only programs that recognize this increasingly important area of public relations and reputation management. Winners of the 2004 program were honored in nine categories, including Community Affairs, CSR Report, Diversity Communications, Environmental Communications and Business Ethics.

See full Press Release.

'Make TIAA-CREF Ethical' Coalition

'Make TIAA-CREF Ethical' Coalition Asks $330 Billion Teacher's Pension Fund to Promote Corporate Responsibility; Coalition Submits Shareholder Resolution Before February 10 Deadline.

The Make-TIAA-CREF Ethical coalition, comprised of worldwide organizations* dedicated to social responsibility, recently met with the powerful teachers' pension fund TIAA-CREF and asked them to take actions.

See full Press Release.

Third Annual Survey of Costs of Corporate Governance

Foley & Lardner LLP Launches Third Annual Survey Investigating the Costs of Corporate Governance:

U.S. Executives Given Opportunity to Share Information on Impact of Sarbanes-Oxley on Public, Private and Nonprofit Companies.

Foley & Lardner LLP announced today the launch of the firm's third annual study measuring the cost of corporate governance reforms on public companies as well as on both private and nonprofit organizations. The surveys associated with this latest incarnation of the award-winning study are now available online at www.foley.com/2005surveys for executives to complete by Friday, February 18, 2005.

See full Article.

Project Offices and Governance Practices Minimize Project Redundancy

Robbins-Gioia Announces That Project Offices and Governance Practices Minimize Project Redundancy -- Reducing Company Costs:

A study released today found that organizations with established governance practices, processes, and accountability activities in place showed a lower level of redundant projects and initiatives in their organizations. Additionally, those organizations with both a project management infrastructure-such as a project management office (PMO)--and governance and accountability practices were even less likely to have redundant initiatives.

This finding is the result of a survey conducted by Robbins-Gioia, the leading program management consulting firm, with approximately 350 senior-level IT and project professionals at the Project World conference in Washington, D.C., September 27-30, 2004, and the Project Management Institute's annual symposium in Anaheim, California, October 26, 2004.

See full Article.

Rating companies on attitude

From the San Francisco Chronical:

Almost six months ago, Morningstar made waves when it started giving mutual funds fiduciary grades for corporate governance.

Now it's doing the same for stocks. On Monday, the Chicago firm gave stewardship grades, ranging from A to F, to about 500 large companies.

See full Article.

Sorry, the Auditor Said, but We Want a Divorce

A New York Times article relating the difficulty experienced between companies and their Auditors at this current compliance situation:

HOWARD ROOT, chief executive of Vascular Solutions, was stunned when Ernst & Young, the Big Four firm that had been its auditor since it was founded in 1997, quit without warning less than three months before Vascular's annual report was due.

Root told the New York Times that Ernst & Young said it quit the account because it didn't have enough people to handle the mountain of extra work created by the Sarbanes-Oxley corporate watchdog act - especially for smaller clients like Vascular Solutions, which had net sales of around $20 million last year. The Sarbanes-Oxley law, passed in 2002, tightens accounting procedures and imposes new reporting rules on publicly traded companies and their outside auditors.

See full Article (registration required).

Results from Corporate Responsibility Survey

Oracle and Economist Intelligence Unit Announce Results from Corporate Responsibility Survey

According to a new study released today by Oracle Corporation and the Economist Intelligence Unit, 85 percent of executives and investors rank corporate responsibility as a central consideration in investment decisions. The study, "The Importance of Corporate Responsibility," surveyed 136 executives across numerous industries and 65 investors to examine the influence of corporate responsibility in the global business community.

One quarter of all Global Fortune 500 companies now produce some type of report that charts their environmental, social or sustainability efforts. The increased presence of corporate responsibility in daily business operations is being driven by a variety of factors, such as the erosion of trust in large corporations, the globalization of business, the corporate-governance movement, the rise in importance of socially responsible funds and sheer competitive pressures.
See Press Release and also see CSRwire posting.

Reforms bring rich pickings for KPMG

Given the significant additional work and the reponsibility required by their work, compensation for quality work needs to grow and is most definitely justified.

Related links:
Reforms bring rich pickings for KPMG
Disgruntled auditors voice their concerns
Compliance work lifts Deloitte figures

SEC pledges to cut costs of controls

The balance between clean operations and the cost of doing so and of reporting it has yet to be achieved.

The US SEC head is in Europe ensuring that international companies' concerns are taken into account.

Related links:
SEC pledges to cut costs of controls
SEC chief in pledge on cost cuts

Pensions Investment Research Consultants switches its focus

Financial Times article:

Shareholder group switches its focus
By Sundeep Tucker
Published: February 10 2005 02:00 Last updated: February 10 2005 02:00

An activist shareholder group is to switch some of its focus from director pay and auditor independence and instead press companies on issues such as boardroom appraisals and succession planning. The move by Pensions Investment Research Consultants, a London-based governance voting service, is a sign that corporate governance activism is moving beyond the controversies of the past five years such as large pay-offs for failed directors.

Most investor groups believe that the 2003 revised Combined Code on Corporate Governance - which incorporated many of the boardroom recommenda-tions made by Sir Derek Higgs - has put a stop to the worst examples of boardroom excess.

As a result, shareholder pressure groups, such as the Association of British Insurers and the National Association of Pension Funds, are increasingly using their collective clout to press companies to adopt practices which they feel will develop the company and thus 'add value' over the long term. The Pirc move was unveiled as part of its 2005 shareholder voting guidelines.

Pirc advises local authority pension funds and fund management groups how to vote at company annual meetings. Its clients boast combined assets under management of $560bn.

Sarbox Not the Only Compliance Challenge

By Kimberly Hill
CIO Today
February 2, 2005 11:55AM

Many firms can reap long-term gains by re-designing and streamlining business processes at the same time as rolling out compliance programs, says AMR Research analyst John Hagerty. He recommends using enterprise performance management applications and techniques, and establishing a primary focus on risk management.

Enterprise software makers and the companies they serve have done much gnashing of teeth in the last year over meeting the requirements of the Sarbanes-Oxley Act (Sarbox). But Sarbox is only one of many regulatory challenges that organizations are struggling to meet, AMR Research's John Hagerty stresses.

See full Article.