Government Advisor Says Hong Kong Economy Being Hurt by Air Pollution

In what the Financial Times calls “the first official admission that worsening air quality is affecting companies’ investment decisions,” senior Hong Kong government advisor Victor Fung, chairman of the Greater Pearl River Delta Business Council and the Li & Fung Ltd. trading firm, says air pollution is having economic consequences. “Up to a year ago [pollution] hadn’t hit our pocketbook. But now people are not coming to Hong Kong to take that job because their kid has asthma.” The article notes that a recent American Chamber of Commerce survey finds that 60 percent of the 140 executives surveyed reported they were “very worried” about pollution affecting their health. The survey also finds that 40 percent of respondents say Hong Kong’s air pollution makes it harder to recruit staff from abroad.

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Los inmigrantes salvan la economía

Los vemos todos los días en nuestras calles, desempeñando múltiples trabajos. Es evidente que la inmigración, aparte de las lamentables imágenes que nos deja de desolación en determinados circuitos ilegales de entrada, o de determinados problemas derivados de la marginación, nos ofrece cada día estampas muy edificantes de gente trabajadora que busca, sobre todo, ganarse el pan.

Y fruto de ese esfuerzo, ganamos todos. Así lo afirma un estudio de Caixa Catalunya según el cual, en el periodo 1995-2005, los inmigrantes han aportado en 3,2 puntos porcentuales el crecimiento económico español (medido en términos de PIB per cápita) permitiendo que éste llegase al 2,6%. Es decir, que sin la inmigración, los españoles seríamos un 0,6% más pobres.

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International Accountants Reject SOX Internal Control Model

I have been commenting on the emergence of an international consensus that has steadily and inexorably been building towards a principles-based, risk-focused approach to internal controls and away from the prescriptive approach embodied in Sec. 404 of the Sarbanes-Oxley Act. Now a seminal report by the International Federation of Accountants adds fuel to this fire. The report reveals broad support for a principles-based, non-prescriptive approach that recognizes the need for companies to develop an internal control system particular to their own specific internal and external environments.

Many jurisdictions are coming to the view that Sec. 404 and related guidance for auditors is the product of a unique rules-based US regulatory framework characterized by detailed and costly compliance mandates. Other jurisdictions, including the UK and Hong Kong, have recently endorsed principles-based and market-led internal control frameworks.

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Corporate crises are years in the making

Of all the intangible assets that a business might want to quantify and enter on to its balance sheet, reputation is at once the most valuable, most delicate and hardest to pin down. Perhaps this is why senior managers have been slow to take the question of corporate reputation seriously. It seems both vast and insubstantial at the same time.

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Germany’s worker directors need to justify their jobs

For Klaus Bräunig the next few months represent a tough, even treacherous, journey. A top lobbyist with Germany’s main industry federation, he is charged with negotiating what he calls one of Germany’s “most dangerous political minefields”. His objective: to reduce the power of workers and trade unionists over corporate decision-making.

Chancellor Angela Merkel is due today to enter the same difficult terrain when she addresses 900 labour officials and politicians in a Berlin hotel on the future of co-determination, the system of worker representation that gives German employees more direct influence over corporate strategy than any other advanced economy.

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Merkel to tackle supervisory board reform

Foreign-based employees of German companies could be given a voice on supervisory boards under proposals on the future role of workers in corporate decision-making in Europe’s largest economy.

The change, due this autumn and which would affect over 700 of Germany’s biggest companies, will be on the agenda on Wednesday at a conference in Berlin on co-determination.

Chancellor Angela Merkel is expected to demand reforms to landmark laws adopted 30 years ago that allow employees to take half the seats on supervisory boards of large companies.

Kurt Biedenkopf, chairman of the high-level commission on co-determination, told the Financial Times that trade union and business representatives in the commission “recognise that an ever increasing number of companies have an ever increasing number of staff in other countries”.

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International Compliance Association Certificate

When: 4 September 2006 (14:00-17:15)
Where: Venue: Crowne Plaza Hotel, Leeds, UK

Foundation Certificate in Compliance Practice - Induction Seminar

Induction seminar introducing potential and existing delegates to the course and covering topical compliance issues.

Visit Information page.

Despido invalidado pese al uso inapropiado de internet en el trabajo

Para que luego digan que las leyes no están hechas para defender a los trabajadores... resulta que un tipo se pasa el tiempo chateando, consultando el correo personal y viendo videos porno (y también comiendo pipas :D) en su trabajo, la empresa le despide... y el Tribunal Supremo declara que el despido no es válido y que la empresa tiene que indemnizarle o readmitirle.

Bueno, leido así puede parecer un tanto sorprendente. Pero no lo es tanto si nos fijamos en el contenido de la sentencia. Y es que el Tribunal Supremo no entra a valorar si el comportamiento del empleado es susceptible o no de despido (de hecho, el tribunal de primera instancia así lo había entendido), sino que se escuda en un defecto formal para dictar su fallo.

Y es que en estos temas jurídicos, las formas son tan importantes (o más) que el fondo. Por eso, es prudente para las empresas disponer de una política de uso apropiado de internet que sea conocida por sus trabajadores.

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Obama Urges Kenyans to Get Tough on Corruption - New York Times

This is the most important message he could take to them!

Onésimo Alvarez-Moro

See article:
Barack Obama strode into a packed auditorium in Nairobi on Monday and attacked an issue that notoriously bedevils Kenyan society: corruption.

He urged people to reject “the insulting idea that corruption is somehow part of Kenyan culture” and “to stand up and speak out against injustices.”

This was Day 5 of his Kenya tour, and at each stop, each speech that he gives, the crowds only grow.

It is an unusual reception for an unusual trip for a Democratic freshman senator from Illinois to be making, but it seems that Mr. Obama, whose father was Kenyan, is using all the rapturous attention to spotlight serious issues that are too often ignored in Africa.

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Winning the Battle Against Burnout

Michael Staver remembers exactly when he knew he was burning out.

He was in the Atlanta airport, en route to what felt like the millionth presentation that he would make that month. He sensed his mental systems shutting down, one by one.

“I’m exhausted, I’m sitting among these odors and screaming babies, and I decided, on the spot, I’d had enough,” he said.

That was almost two years ago. Today, Mr. Staver, 45, still runs the Staver Group, his executive training company on Amelia Island, Fla. But he now has a staff of people who give at least half the speeches he used to give, and hold even more of the training sessions. He spends a lot more time writing, and working one on one with senior executives — the part of the job he loves most.

A few clients balked at first, but they came around. “I had nurtured a culture of dependency on the part of my clients,” Mr. Staver said. “I had to break them of the idea they had to get all their attention from me alone.”

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Centavos petroleros para los países pobres

La ONU apelará a los grandes exportadores de petróleo para que asistan a los 50 países más pobres del mundo a cubrir sus necesidades más urgentes.

El subsecretario general de la Organización de las Naciones Unidas (ONU) y alto representante para los Países Menos Desarrollados, Anwarul Karim Chowdhury, propuso a las naciones petroleras asignar en los próximos 10 años 10 centavos de dólar por cada barril vendido al desarrollo de infraestructura del mundo pobre.

"Esto es parte de nuestros gestiones para asegurar nuevas fuentes de financiación para el desarrollo", dijo Chowdhury a IPS. Para implementar la propuesta, agregó, "necesitamos la voluntad expresa de los productores y de las empresas directamente involucradas en la producción de petróleo".

"Si importantes organizaciones como las fundaciones de Bill y Melinda Gates, Ted Turner y George Soros se concentraron en los últimos años en los países más necesitados, ¿por qué no los productores de petróleo, cuyas ganancias se multiplicaron tanto?", se preguntó Chowdhury.

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Regulators seek comment on investor protection rule

Instrument designed to provide harmonization, opportunity to make minor enhancements and consequential amendments

Securities regulators in Ontario and Quebec, the Autorité des marchés financiers and the Ontario Securities Commission, are seeking comments on proposed rule that seeks to protect the interests of minority security holders in certain transactions.

It introduces harmonized requirements for enhanced disclosure, independent valuations and majority of minority security holder approval for certain transactions. The proposed instrument and companion policy are being published for a 90-day comment period.

The regulators indicate that the instrument is designed to achieve three objectives: providing a single harmonized instrument governing certain transactions in both Québec and Ontario; it provides an opportunity to make minor enhancements to the existing rules; and, proposes a number of consequential amendments that would otherwise be required to reflect the new harmonized take-over bid and issuer bid regime that is being created in Ontario and Quebec.

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PCAOB 2005 Annual Report issued

Bernanke calls for fairer globalisation

Ben Bernanke, the chairman of the Federal Reserve, on Friday called on global policymakers to do more to ensure the benefits of globalisation are widely spread within their countries.

The Fed chairman said it was essential to build a “consensus for welfare-enhancing change” in order to avoid a resurgence of protectionism.

He urged governments directly to address the plight of workers whose livelihoods are threatened by changing patterns of international production and trade, for instance by helping them retrain for new jobs.

“Further progress in global economic integration should not be taken for granted,” Mr Bernanke told the Fed’s annual symposium at the mountain resort of Jackson Hole in Wyoming.

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Li to give third of $18bn wealth to charity

Li Ka-shing will bequeathe at least a third of his fortune - which is estimated at $18.8bn and rising fast - to his eponymous charitable foundation, as Asia’s richest man follows in the footsteps of his American peers Bill Gates and Warren Buffett.

”The [Li Ka-Shing] Foundation is my third son. Its size will not be less than one-third of my fortune,” Mr Li, a widower with two sons, said on Thursday at a results briefing for his two corporate flagships, Cheung Kong Holdings and Hutchison Whampoa.

The two Hong Kong-based companies reported a combined first-half net profit of $4bn on Thursday. Under the territory’s low tax regime, the dividends Mr Li and other Hong Kong tycoons receive from their companies are not taxed.

In June, Mr Buffett, chairman of Berkshire Hathaway, announced that he would donate 85 per cent of his $44bn fortune to the Bill and Melinda Gates Foundation, which already manages $35bn. Mr Gates, Microsoft founder, is also committed to giving the bulk of his remaining $50bn fortune to the foundation.

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Top Ten List for Boardmembers!

When: Thursday, September 14, 2006, 6:15 - 8:30 pm -- Cocktails/Networking, Dinner and Program
Where: 103 West, 103 West Paces Ferry

"Ten things you need to know to stay out of trouble."

If you are a current boardmember or want to be in the future, this is a must hear presentation!

Featuring Lizanne Thomas, Board member of Krispy Kreme and Partner, Jones Day

Registration Deadline
Friday, September 08, 2006


See Details and online registration.

How to Implement Disaster Recovery with Complex IT Configurations

When: September 6, 2006, 12:30 p.m. Eastern / 9:30 a.m. Pacific (45 Minutes)

How do you manage disaster recovery plans for complex IT configurations? Do you need to protect data stored on Windows and UNIX and perhaps replicate to a less expensive platform, such as Linux? Cluster configurations offer high availability, but how do you overcome the challenges of planning and managing a cluster?

Join us for this eSeminar and find out how Microsoft Cluster Server clusters and virtual server technology can work alone or in tandem to help you protect your data. Explore different types of cluster configurations, the use of virtual server technology-- such as VMWare or Virtual Servers-- in a replica environment, and cross-platform disaster recovery support.

See full Information.

Decimocuarta Reunión Regional Asiática, Busan, República de Corea

Fecha: 29 de agosto - 1° de septiembre

Las mejores condiciones de trabajo benefician a todos en las fábricas de Asia

La capacidad de Asia para mantener su impresionante crecimiento económico y ventaja competitiva dependerá en gran medida de la capacidad de los gobiernos y de las empresas para garantizar que los beneficios se reparten entre los empleadores, los trabajadores y la población en general. Esta es la conclusión a la que se llega en un informe recientemente publicado (Nota 1) sobre las tendencias económicas y sociales en la región, elaborado para la Reunión Regional Asiática de la Organización Internacional del Trabajo. La OIT en línea informa sobre un nuevo enfoque que, al vincular la productividad con mejores condiciones de trabajo, está logrando que los beneficios de la globalización se dejen sentir en todas partes desde los talleres hasta la sala de la junta directiva.
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Puede que el nombre de la empresa Chien Thang Garment Company, situada en Hanoi (Viet Nam), no sea muy conocido, pero las marcas que produce sí que nos resultan familiares: Gap, JC Penny, C&A, Yessica, Zara. El 95 por ciento de lo que produce la empresa se destina a la exportación.

Una experiencia de casi 40 años en la confección de prendas de vestir y artículos de cuero y una red de 10 fábricas, que emplean a 3.200 personas, confieren a esta empresa estatal una posición privilegiada para sacar el máximo partido de la apertura y expansión de la economía de Viet Nam.

Ver Nota de Prensa completa.

Good Governance and Development in The Knowledge-Based Society

The ministers of foreign affairs and heads of delegation of the member states of the Organization Of American States (OAS), meeting in Santo Domingo, Dominican Republic, on the occasion of the thirty-sixth regular session of the General Assembly,

Recalling that the Charter of the OAS proclaims that the historic mission of the Americas is to offer human beings a land of liberty and a favorable environment for the development of their personality and the realization of their just aspirations;

Reafirming their commitment, expressed in the Charter of the OAS, to give primary importance within their development plans to the encouragement of education, science, technology, and culture, oriented toward the overall improvement of the individual, and as a foundation for democracy, social justice, and progress;

Recognizing that humankind moves rapidly toward a new development model focused on the human person, based on the intensive use of knowledge and innovation, and with the capacity of information and communication technologies (hereafter referred to as ICTs) to produce, access, and disseminate knowledge, as an important tool to strengthen democratic governance, bring about equitable and sustainable development in the Americas, and reduce the digital divide;

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Struck-down SEC requirement may still improve hedge fund compliance

Many funds plan to retain compliance practices

The U.S. Securities and Exchange Commission’s short-lived effort to require hedge fund registration may end up improving hedge fund industry compliance, even though the requirement was struck down, suggests new research from Greenwich Associates.

Greenwich reports that, despite the fact that nearly 20% of the registered hedge funds participating in its recent study plan to de-register in the wake of a federal appellate court ruling striking down the SEC registration order, a larger proportion of hedge funds said they plan to retain new compliance processes, practices and staffing implemented in order to meet registration requirements.

More than 30% of the hedge funds surveyed by Greenwich Associates said that, in order to comply with the original SEC registration requirement, they expanded staffing, largely in their compliance departments. “For most funds, increased staffing was only part of the changes brought on by the regulator,” says Greenwich Associates consultant Peter D’Amario. “Hedge funds also upgraded technology, implemented operational ‘best practices’ and initiated compliance monitoring procedures.”

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Financial Globalization, Governance, and the Evolution of the Home Bias

Despite the disappearance of formal barriers to international investment across countries, we find that the average home bias of U.S. investors towards the 46 countries with the largest equity markets did not fall from 1994 to 2004 when countries are equally weighted but fell when countries are weighted by market capitalization. This evidence is inconsistent with portfolio theory explanations of the home bias, but is consistent with what we call the optimal insider ownership theory of the home bias.

Since foreign investors can only own shares not held by insiders, there will be a large home bias towards countries in which insiders own large stakes in corporations. Consequently, for the home bias to fall substantially, insider ownership has to fall in countries where it is high. Poor governance leads to concentrated insider ownership, so that governance improvements make it possible for corporate ownership to become more dispersed and for the home bias to fall. We find that the home bias of U.S. investors decreased the most towards countries in which the ownership by corporate insiders is low and countries in which ownership by corporate insiders fell. Using firm-level data for Korea, we find that portfolio equity investment by foreign investors in Korean firms is inversely related to insider ownership and that the firms that attract the most foreign portfolio equity investment are large firms with dispersed ownership.

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Pressure on board of directors for options backdating

There are several articles and pieces on the pressure backdating is going to put on board of directors at companies. I have commented on the issue several times. Besides this the SEC has pursued Wells notices against the board of Mercury Interactive.

The New York times piece on Mercury also asks several questions about the compensation and approval practices of boards and their involvement. Granted this article is less sensational than other the NYTimes write but there are several points to consider.

"Even if the S.E.C. decides against taking further action against the directors, the fact that it has put the company’s compensation committee on notice is unusual. Corporate governance experts say that it appears to be the first time that members of an entire compensation or audit committee could face civil charges in the wake of a financial scandal."

See full Article.

Option Probes Cited for Record Number of Late Filings

The widening options-timing scandal contributed mightily to a record-setting number of large U.S. corporations filing late financial reports for the second quarter, a study released Wednesday said.

Market research firm Glass Lewis & Co. said 138 companies with market capitalizations above $75 million reported in the second week of August that their quarterly reports would be late.

The most-often cited reason for delay was the need to review past option grants, the firm said.

"Companies filed more late filings for the second quarter of 2006 than for any other quarter since we began tracking them during the first quarter of 2004," said Glass Lewis, based on a review of Securities and Exchange Commission documents.

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Why company chairmen were wrong about new rules

When chairmen of the UK'S FTSE 100 companies recently met the Financial Reporting Council (FRC), which oversees accounting and auditing regulation, to discuss corporate governance, they raised serious criticisms of international financial reporting standards (IFRS).

But while the majority felt that the difficulties with IFRS were fundamental, I believe the causes are more likely to be teething troubles or a misplaced nostalgia for an accounting regime that would, in fact, have moved in much the same direction as IFRS. However, I do agree there should be more discussion of fair value accounting, which relies on market values or a calculation of present value.

The chairmen's complaints, often strident, can be summarised thus:

*Company accounts have become longer and less intelligible, or "comprehensive at the expense of being comprehensible".

*The information is not being used by investors and analysts, or by companies in running the business.

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Tight quarters, mobility limit personal touch at work

Home-grown dahlias protruding from a squat, glass vase sitting precariously on the corner of a desk. A photo tacked to a cubicle wall, showing off the tennis-playing daughter. A shiny trophy won at a company picnic, all but hidden among work materials.

They’re all homey, individual touches employees use to carve a personal niche out of an impersonal work world. And they might become history. The number of workers adding a personal touch or two has declined sharply—from 85 percent in 1996 to 59 percent in 2006—according to a survey of nearly 700 U.S. office workers.

The results are from the second of a three-part Workplace Index Survey on the Nature of Work in 2006 for Steelcase, a global manufacturer of office environments. Part I, released in July, looked at the growing trend of employees working while on vacation. Part III, to be released in September, will deal with ergonomics.

Fewer employees this time around blamed their employer for discouraging putting a personal stamp on their work space. Only 25 percent in 2006 said their company does not encourage personalized work areas, compared to 42 percent in 1996 who said this was not encouraged.

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Steps that can make mining a global force for good

There has never been a more critical time to ensure that mining contributes to long-lasting development. Soaring metals and minerals prices are bringing billions of dollars in tax revenues to mineral-endowed countries throughout the developing world, enhancing prospects for economic growth. It is essential that these windfall funds are used effectively for community development. This challenge is global.

International mining companies, including state-owned companies from emerging economies, are increasing their investment in poor countries as mines in richer regions approach the end of their useful lives and China and India search for new sources of energy and minerals to fuel their growth. Equally, popular pressure is mounting in poor mineral states that have yet to demonstrate to their citizens that foreign direct investment can generate economic and social benefits.

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Set for Aug 28

EU contra EEUU sobre Doha

Han empezado las recriminaciones sobre la suspensión de la Ronda Doha, las negociaciones multilaterales de comercio internacional. La Unión Europea está criticando a los Estados Unidos, especialmente por no ofrecer suficientes concesiones en las ayudas a su agricultura. ¿Qué os parece? La EU criticando a otros por sus ayudas a agricultura.

No digo que no hay razón por criticar a los EEUU en su apoyo agrícola pero, tanto ellos como la UE están sujetos a sus agricultores a costa de los más necesitados.

Ya han habido suficientes estudios demostrando que los pobres del mundo se beneficiarían y mucho si pudieran exportar más de lo que ellos producen. Hace tiempo que Oxfam Intermón, que no son especialmente amantes del mundo capitalista libre, ha salido con estudios demostrándolo.

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How ethics can help establish unified corporate culture

From Mr Paul Basson.

Sir, John Plender and Avinash Persaud ("When compliance is not enough", August 21) rightly assert that the importance of business ethics has, until now, been dangerously ignored by many corporations. But the debate now needs to move on from whether building and maintaining an ethical corporate culture is a good thing - it absolutely is - to how company managers can use that culture to positive ends.

This will demonstrate how a focus on ethics can create real value for companies, and hopefully encourage more of them to take ethics seriously.

Establishing a unified corporate culture is increasingly important in a global economy where merger and acquisition activity is frequent and often crosses borders. Following a multinational merger - Mittal-Arcelor and O2-Telefónica would be recent examples - the management faces a huge challenge in ensuring all employees understand that the new company has a single identity and, just as importantly, a single set of values to which it works.

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An executive perspective on employee benefits: A McKinsey Survey

The vast majority of US executives see employee benefits as important to their company's competitiveness, according to the latest McKinsey Quarterly survey.

Fully 88 percent of the respondents name human-resources concerns—particularly attracting and retaining talent plus meeting responsibilities to employees—as the main reasons for offering benefits.

Despite this motivation, many companies haven't learned what their employees really want from benefit programs, and few actually measure the performance of (or return on investment from) their benefit offerings.

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Exploring 'Options' to Avoid Backdating Woes

The most recent corporate scandal, backdating stock options, involves (alleged) violations of duty by company management, the grant dates being deliberately backdated to take advantage of lower stock prices. The assumption is that the exercise (or strike) price of employee stock options legally must be fixed at fair market value as of the grant date; deliberately backdating is per se a fraud because the favored grantee was issued options "in the money."

Why were so many boards and compensation committees seemingly cavalier about the strike price? Why weren't they scrupulously careful, ensuring fair market value was arrived at in "good faith" (the Internal Revenue Code standard). Without pretending inside knowledge, my assumption is that, at least in many instances, the boards believed that not much hung on the outcome. During the periods in question, there was nothing wrong in awarding stock options "in the money" as of the date of the award. Such options are known as 'non-quals' and are customarily used in lieu of or in addition to incentive stock options, the latter requiring that the strike price be set at fair market value on the grant date.

The non-qual exercise price could be set as low as 25 percent of current fair market value without tax to the grantee. Backdating, as a way of establishing fair market value, can be appropriate; many plans require that the exercise price be established at the trailing average of the last, say, 30 days of closing prices. That form of backdating makes sense in a volatile market.

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Warning: interruption overload

Not long ago, information overload was the bane of office life - a deluge of data inundating our workstations and destroying our collective productivity. Then we discovered that so much information on the internet was rubbish and that we could safely ignore any e-mail addressed to more than three people. Now, though, there is a new workplace affliction: interruption overload.

People used to be able to interrupt you at work only by phoning or walking into your office. Now they can do so by e-mail, instant messaging, mobile phones (with voice calls and text messages) and BlackBerries or personal digital assistants.

"The profusion of communications channels is definitely harmful for productivity, because it leads to more interruptions," says Jakob Nielsen, an expert on information technology usability. "For people doing knowledge work - the most highly paid employees - every time you are interrupted it takes 5-15 minutes to fully recapture your train of thought and get back to being completely immersed in your main task."

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The market discipline that is not so tight

In the Anglo-American model of capitalism the stock market imposes a ferocious discipline on managers of quoted companies.

For a start, the movement of the share price offers a minute-by-minute critical commentary on corporate performance and prospects. Quarterly results are closely examined by stock market analysts, fund managers and journalists, and there is an ever-present threat of hostile takeover. The credibility of top executives in this system depends on their generating consistent increases in earnings. They also have to develop the art of carefully guiding analysts’ expectations and subsequently “hitting the numbers”.

Putting chief executives into a financial pressure cooker in this way has dis­advantages, not least the pressure to lose their moral compass and cook the books. The underlying as­sumption is that companies are capable of delivering consistently rising, above-average earnings. Yet not all companies can be above average.

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Risk ratings developed for hedge funds

Several of the world’s largest ratings agencies are developing wide-ranging credit and risk ratings on hedge funds and their managers, pushing the $1,200bn hedge fund business further into the investment mainstream.

Hedge funds have been attracting investment from conservative investors such as pension funds. To do this, they had to convince investors that the perception of hedge funds as a risky investment is no longer valid.

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Do-it-yourself is free trade’s best ‘plan B’

When gardens are neglected, weeds sprout. The withering of the Doha world trade round has led, predictably, to a flourishing crop of alternatives. As well as accelerating the growth of preferential bilateral deals, which frequently generate more political puffery than economic substance, the collapse of the talks has revived interest in grand initiatives spanning entire regions.

One is Japan’s big idea of expanding existing plans for an east Asian economic community to include India, Australia and New Zealand. A yet more ambitious proposal, floated by Fred Bergsten, director of the Institute for International Economics in Washington DC, on this page last week, is for a free trade area of the Asia Pacific (FTAAP) embracing the 21 members of the Asia Pacific Economic Co-operation forum (Apec).

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Why EU mergers are becoming more tricky

When Neelie Kroes took on the job of European Union competition commissioner two years ago, there were a few things she knew needed fixing.

The Dutch former cabinet minister was quick to realise that the fight against cartels demanded greater focus and speedier results. She pushed through reform of the European Commission’s powers to scrutinise government subsidies and, more recently, set the EU’s top antitrust regulator rethinking a third core area: the battle against large companies that abuse their dominant market position.

The rest of this article is for FT.com subscribers only

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Philips hit by corruption charges

Hamburg’s prosecutor is investigating some 100 current and former employees of Philips, the Dutch electronics group, and retail chains including Media-Saturn-Holding (MSH) for alleged corruption, FT Deutschland, the FT’s sister newspaper, has learned.

The Philips staff are alleged to have bribed employees at big retails outlets in Germany to gain contracts. Philips and MSH confirmed that an investigation is underway.

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China Puts Price on Head of Rare Animals

The Chinese government is inviting bids from foreign tourists for the right to hunt endangered species under a kill-to-conserve campaign, a newspaper reported today.

In the first auction, which will take place on Sunday in Chengdu, capital of the south-western province of Sichuan, the starting price for a permit to shoot a wild yak, of which there are fewer than 15,000 remaining in the world, is $40,000 (£21,000). Bids to bag an argali (wild sheep prized for their massive spiral horns) begin at $10,000. Wolves - the only predator on the list - may go for as little as $200.

The Beijing Youth Daily said this was the first time China had auctioned hunting licences, a move that looks likely to provoke controversy.

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Habits of the busiest acquirers

When M&A practitioners plan and execute a merger, they go to great lengths to tilt the odds in favor of creating shareholder value.

Some favored techniques—such as assembling a worldclass M&A team, modifying the organizational design of the acquiring company, and adding systems to smooth integration—can help but do not guarantee success.

Interviews with executives at some of the most acquisitive US companies showed that those reaping the greatest long-term rewards from the markets often take a distinctive approach to M&A.

The markets are more likely to reward companies that focus on their strategic goals and choose acquisitions that complement their distinctive capabilities.

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Europe's work ethic

Reducing working hours is one of organised labour's oldest and most fundamental demands. Over the past century, working time has steadily come down in Europe, if not in workaholic America, as unions have pushed governments into cutting the standard work week. Yet the pendulum now seems to be swinging back, in response not only to globalisation but also to a changing European mood. Confirmation of this has come in a Financial Times/Harris poll of nearly 10,000 people in the UK, France, Germany, Italy and Spain. Overall, 47 per cent of these west Europeans declared themselves against government action to restrict working hours, leaving 40 per cent still in favour of such controls.

This overall result masks some important national differences. The most striking is not that 52 per cent of Britons reject curbs on working time (even though these are relatively insignificant in the UK), but that the same proportion of French, and an even higher ratio (65 per cent) of Germans, feel the same way in spite of union and some official support for work limits. In Italy, a slim plurality now opposes working time limits. The survey's outlier is Spain, where 72 per cent of the population back work time limits. But this may be because Spaniards feel they toil enough with the extra psychological burden of returning to work after a siesta.

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Executives Switch Jobs More Often This Year Amid Added Pressure

Top executives at U.S. companies switched jobs more than twice as often in the first half of this year than in 2005 as managers come under greater pressure from regulators and shareholders, according to experts.

A total of 15,650 managers from chief executive officers to vice presidents changed jobs January through June, more than twice the 6,489 who did so in the same period in 2005, New York-based Liberum Research said in a study released in July.

The pressures of complying with the Sarbanes-Oxley Act of 2002 and shareholders' demand for better performance may be leading some executives to retire early and forcing others out, said Elise Walton, director of corporate governance practices at management consulting firm Mercer Delta Consulting in New York.

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The day Dr Evil wounded a financial giant

Of the world’s top financial institutions none has done more than Citigroup under Chuck Prince’s leadership to address ethical problems and attempt to instil an ethical culture. Citigroup has nonetheless been plagued by high-profile ethical lapses, underlining how difficult it can be to embed sound values in a diverse and complex international organisation.

The challenge when Chuck Prince became chief executive officer in 2003 was that Citigroup was under pressure from regulators and suffering severe reputational damage that threatened to tarnish its brand. It had been a prominent provider of finance, on- and off-balance sheet, to Enron, WorldCom, Adelphia and Parmalat, among others.

The bad publicity was not helped by some very maladroit behaviour by bonus-hungry bankers. A prime example related to Citigroup’s role in removing liabilities from the Parmalat balance sheet through a vehicle the bank’s executives chose to call Buco Nero – Italian for Black Hole.

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AWB still fighting for document suppression

Why is it that those who are superior to these managers that do not want to release documents, just summarily fire them forthwith.

Holding onto documents clearly shows guilt or obfuscation and both should be firing offences!

Onésimo Alvarez-Moro

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The wheat exporter AWB is continuing its fight to hold back documents from the oil-for-food inquiry.

Earlier this month the Federal Court reserved its judgement on the company's legal privilege claim to withhold about 800 documents, but negotiations led to the release of about 500 of those to the inquiry.

Legal representative for AWB James Judd QC today clashed with Commissioner Terence Cole about whether further documents should be produced under the inquiry's terms of reference.

The unreleased documents include more advice from a US public relations firm on whether AWB should have apologised over alleged kickbacks to the Iraqi dictator Saddam Hussein.

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Italy's Fashion Houses Wake Up to the Impact of Counterfeit Goods

Mario Boselli, scion of a textile empire that dates back to 1586, thinks he's found a way to outsmart the counterfeiters who have plagued the Italian fashion industry. A large, courtly man in his sixties, Boselli sits in his showroom in Milan, surrounded by racks of avant-garde clothes. He explains how his company makes a sophisticated synthetic fabric called Jungle for Gianni Versace. Suddenly, he gets up and returns with a swath of the intricately patterned jersey fabric. "It's difficult to copy," says Boselli. "The printing process is too expensive."

According to Boselli, who also heads Milan-based Camera Nazionale della Moda Italiana, the leading fashion trade group in Italy, designers have been racking their brains to thwart counterfeiters. Some are even starting to imbed microchips in products like handbags and blouses, he notes. Despite their best efforts, however, most haven't been able to outwit the counterfeiters.

Of course, fakes are hardly new in the world of designer fashion, but the problem lately has reached epidemic proportions. The First Global Congress on Combating Counterfeiting reported in 2004 (the latest year for which it has figures) that trade in counterfeiting goods has reached $450 billion globally. And in Italy alone, the market for counterfeit products is valued at $6.4 billion, of which 60 percent comes from clothes and other fashion products, according to the Milan-based Italian Institute Against Counterfeit Goods (INDICAM).

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Corporate Governance Blog: Securities Class Action Rumblings in EuropeSubmitted by: Bruce Carton, Vice President

This article (subscription req'd) entitled "Head of the Class" in the August 18, 2006 issue of TheDeal.com suggests that the long-standing aversion to securities class actions in Europe may soon become a thing of the past. According to the article,

"Within the past year, several European Union countries have either enacted laws or considered legislation that would pave the way for class actions. Last summer, a new Dutch law authorized associations representing injured parties to collectively negotiate settlements; in July, a group of French investors followed up with a class action in a Dutch court. The target: Airbus parent European Aeronautic Defence and Space Co., or EADS, whose stock recently collapsed. In the past 12 months, Germany and Spain began to permit collective shareholder action under certain circumstances. In July, the center-left government of Italian Prime Minister Romano Prodi passed a decree explicitly authorizing class actions; if parliament does not approve the law by September, it will expire. France's center-right government is considering a similar statute."

The article states that this possible "change of heart" in Europe may be the product of a recent spate of scandals that have harmed European investors, including "the December 2003 insolvency of [Italian] dairy company Parmalat Finanziaria SpA, which collapsed with some 14 billion Euros ($18 billion) in debt, and the 2002 demise of canned food maker Cirio SpA, which defaulted with more than 1 billion Euros in outstanding obligations. More than 100,000 Italian investors held Cirio and Parmalat bonds."

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Ask the experts: Business ethics

The new millennium has been marked by a succession of corporate scandals caused by astonishing ethical lapses. What started with Enron has turned out to be a global phenomenon with enormous repercussions.

In response many companies have expanded their governance codes and compliance functions which has exacerbated the problem by encouraging a risk management culture rather than an ethics culture. Too many boards have delegated the task of ethics to ethics officers, who in turn have relied on consultants to define the company¹s values. Ethics has become something that “other people” do in the company.

In a series of articles in Business Life and a new book, All You Need To Know About Ethics and Finance, FT columnist, John Plender (right) and Avinash Persaud, chairman of Intelligence Capital Limited, examine the issues and pressures faced by all in business and finance.

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Hawkamah and Yemen's Ministry of Finance join forces to promote corporate governance and establish best-practice stock market in Sana'a

Hawkamah Institute for Corporate Governance (Hawkamah), a subsidiary of the Dubai International Financial Centre (DIFC) Authority, today announced it has signed a Memorandum of Understanding (MoU) with the Yemeni Ministry of Finance to actively promote and improve corporate governance practices in Yemen.

Hawkamah will also provide corporate governance advice to the Yemeni authorities in relation to the legal and regulatory issues relevant to the establishment of the country's first stock market and capital market authority.

The common objective of Hawkamah and the Yemeni Ministry of Finance is to improve the corporate governance practices of public and private sector entities in Yemen, including state-owned enterprises (SOEs), listed companies, family-owned enterprises (FOEs) and small and medium enterprises (SMEs).

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Investors Back Shareholder Resolutions

This year, two measures got more than two-thirds average support among shareholders: calls to repeal classified boards and moves seeking to erase supermajority voting, according to Institutional Shareholder Services.

Investors are increasingly supporting shareholder resolutions calling for change in a company’s corporate governance practices. On average, eight of 11 different measures received more support this past year than during the 2005 proxy voting season, according to a preliminary Institutional Shareholder Services (ISS) analysis of the 2006 proxy voting season.

To be sure, such resolutions aren't binding on the target company and thus are, in effect, straw polls. But in recent years, more and more companies have made changes in their corporate governance practices after receiving majority support—or strong minority support—for a related measure.

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Moody's Cites Effects of New Pension Law

Moody's contends that companies with poorly funded plans may start to redirect cash flows into pensions to avoid having plans deemed "at risk."

Requirements of the new pension bill signed by President Bush on Thursday could have an impact on credit ratings, warns Moody's Investors Service.

In a new report, the credit-rating agency explained that companies with underfunded pension plans will likely borrow to cover the increased contributions that the new Pension Protection Act of 2006 will require starting in 2008. Generally, the additional borrowing will not affect credit ratings because companies will be exchanging pension-related debt for contractual debt, Moody's acknowledged.

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When compliance is not enough

The extraordinary expansion of company legislation and corporate governance codes across the world since the collapse of Enron, the energy trader, has had many unintended consequences. One of the more paradoxical is the damage that has been done to business ethics.

The attempt to legislate and regulate people into good behaviour has spawned a compliance culture rather than an ethical culture. Too many boards have outsourced the task of ethics to ethics officers, who have turned to consultants to define the company’s values. Ethics have become something that “other people” in the organisation worry about, leaving everyone else unfettered by such concerns. Does it matter? And if it does, what can be done about it?

We will argue in this and subsequent extracts from a new book* that ethics do matter in business because they underpin trust, which is fundamental to business relations. Markets work more efficiently where there is trust between parti­cipants. Within the company an ethical culture provides the glue that makes for a cohesive and effective organisation.

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Directors’ reports: the disclosure of information to auditors

The Companies (Audit, Investigations and Community Enterprise) Act 2004 introduced a new requirement that the directors' report must contain a statement about the disclosure of information to auditors. This briefing provides some practical steps for directors to consider.

See full Briefing, in pdf format.