Breakingviews

RUSAL oligarch row isn’t about governance

By Pierre Briançon

The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

Viktor Vekselberg is shocked – positively shocked – that the company he has chaired since its inception could find itself in such a “deep crisis”. So he says he is quitting his chairmanship of UC RUSAL, while the Russian aluminium giant’s controlling shareholder, Oleg Deripaska, says he would have fired his former ally anyway. Of course the row has little to do with corporate governance.

Fed strikes right balance with latest stress test

By Antony Currie The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

The Federal Reserve has found the right balance with its latest round of stress tests of the 19 largest U.S. banks. Unlike its last look under the hood of American finance a year ago, the central bank’s regulators this time are giving investors reams of more useful data to help separate the industry’s sheep from its goats. And they’re acting prudently to ensure capital adequacy in the system.

The results were better than expected considering the extremity of the stress scenario: banks had to prove they had enough capital to withstand a 13 percent unemployment rate, a 50 percent crash in the stock market and a 20 percent slump in house prices. That led investors to assume that few banks would be allowed to reinstate or boost dividends or buy back stock.

Splitting AT&T CEO and chairman roles a no-brainer

By Robert Cyran

The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

Randall Stephenson’s botched plan to buy T-Mobile USA came with a $4 billion tab. The board didn’t see fit to hold him fully accountable. But shareholders can have their own say – and should vote to strip Stephenson of his chairman title and install an independent.

Glencore faces fight to land $5.5 bln Viterra deal

By Kevin Allison

The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

Ivan Glasenberg seems to like difficult deals. The chief executive of commodity trader Glencore is still trying to win over shareholders in Xstrata to a proposed $90 billion merger with the miner. But he is potentially also in the market for a smaller but no less challenging acquisition, of Canadian grain handler Viterra.

Facebook’s underwriter friends are cheap insurance

By Robert Cyran
The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

Facebook has friended a raft of new underwriters for its forthcoming initial public offering. According to the company’s latest filing, there are now 31 of them, up from an initial six. That may be overkill, but the social network’s clout means it can line up the extra resources and reputational buffing at little, if any, cost.

Icahn targets given red alert by Dynegy debacle

By Christopher Swann
The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

Carl Icahn’s reputation already precedes him when he turns up to agitate. Now a court-appointed official has shredded a retooling at Dynegy, where the uppity investor meddled and installed directors. Companies on the receiving end of his tactics, like CVR Energy, have all the more reason to spurn Icahn.

Once a $13 billion powerhouse, Dynegy’s equity is now worth a mere $70 million. The 76-year-old raider-cum-activist has played a significant role in the latest step of the downfall, ever since he helped block a $600 million leveraged buyout by Blackstone at the end of 2010. With a stake of nearly 15 percent, he is the largest shareholder – and responsible for two of Dynegy’s six directors.

Silicon Valley’s undeserved moral exceptionalism

By Rob Cox

This essay appears in the March 19 edition of Newsweek. The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

Silicon Valley likes to think of itself as morally exceptional. When Google went public in 2004, the Internet search company’s wunderkind founders, Larry Page and Sergey Brin, penned a letter to prospective shareholders that has become the Internet industry’s version of the Magna Carta. In it, they pledged that Google was “not a conventional company” but one focused on “making the world a better place.” Their manifesto followed a venerable tradition in Silicon Valley (meaning the swath of technology and Internet companies based in the cities and towns between San Francisco and San Jose). A decade earlier Apple co-founder Steve Jobs insisted that “being the richest man in the cemetery doesn’t matter to me … Going to bed at night saying we’ve done something wonderful … that’s what matters to me.”

M&A lawyers lob stones at Goldman from glass house

By Reynolds Holding
The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

M&A lawyers tossed stones at Goldman Sachs from a glass house. Debate over how the bank played both sides of the El Paso sale to Kinder Morgan drowned out other hot topics at this week’s dealmaker jamboree in New Orleans. Bankers and chief executives took beatings over other conflicts of interest, too. For an event organized by and for mainly attorneys, however, there was surprisingly little self-reflection.

Bankers behaving badly are no black swans

By Antony Currie

The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

It’s hard to feel too sympathetic for wealthy financiers caught behaving badly. But considering the stress of the job, and simple statistics, it shouldn’t be too shocking to hear of Wall Streeters stabbing a cabbie or defecating in public. More surprising is that such tales are so rare.

Some 170,000 people are employed in the securities industry in New York City, many of them working in high-pressure roles overseeing or advising others about vast sums of money. Traders, especially, seem prime candidates for becoming social miscreants. Academic studies have even mined the traits they share with psychopaths.

Quotas for female directors are a necessary evil

By Christine Murray

The author is a Reuters Breakingviews columnist. The opinions expressed are her own.

Modern liberals wax lyrical about equality but turn queasy at the mention of quotas for women on boards. In a perfect world regulation would not be needed, but the softly-softly approach delivers inadequate results, too slowly. Reform will be hastened by sensible rules.