Comments on: Felix Salmon smackdown watch, corporate-governance edition http://blogs.reuters.com/felix-salmon/2012/10/18/felix-salmon-smackdown-watch-corporate-governance-edition/ A slice of lime in the soda Sun, 26 Oct 2014 19:05:02 +0000 hourly 1 http://wordpress.org/?v=4.2.5 By: Corpgov.net http://blogs.reuters.com/felix-salmon/2012/10/18/felix-salmon-smackdown-watch-corporate-governance-edition/comment-page-1/#comment-44294 Mon, 29 Oct 2012 20:16:31 +0000 https://blogs.reuters.com/felix-salmon/?p=19032#comment-44294 Felix,

You got it right the first time. Goldman Sachs needs a corporate governance revamp. Here’s one more example of how screwed up the board is: Goldman has three key committees… audit, compensation and corporate governance/nominating. Each has the same 10 “independent” directors. The reason boards have committees is so that a few of them specialized in each area can delve in depth and report back to the board. Not so at Goldman.

A proxy access proposal is desperately needed to get new blood on the GS board.

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By: Corpgov.net http://blogs.reuters.com/felix-salmon/2012/10/18/felix-salmon-smackdown-watch-corporate-governance-edition/comment-page-1/#comment-44293 Mon, 29 Oct 2012 20:16:00 +0000 https://blogs.reuters.com/felix-salmon/?p=19032#comment-44293 Felix,

You got it right the first time. Goldman Sachs needs a corporate governance revamp. Here’s one more example of how screwed up the board is: Goldman has three key committees… audit, compensation and corporate governance/nominating. Each has the same 10 “independent” directors. The reason boards have committees is so that a few of them specialized in each area can delve in depth and report back to the board. Not so at Goldman.

A proxy access proposal is desperately needed to get new blood on the GS board.

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By: duh2 http://blogs.reuters.com/felix-salmon/2012/10/18/felix-salmon-smackdown-watch-corporate-governance-edition/comment-page-1/#comment-44122 Tue, 23 Oct 2012 22:43:44 +0000 https://blogs.reuters.com/felix-salmon/?p=19032#comment-44122 I like how Felix’s last paragraph basically sums up to “People I agree with should be on boards, and people I don’t, shouldn’t!”

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By: Frwip http://blogs.reuters.com/felix-salmon/2012/10/18/felix-salmon-smackdown-watch-corporate-governance-edition/comment-page-1/#comment-44021 Thu, 18 Oct 2012 18:40:45 +0000 https://blogs.reuters.com/felix-salmon/?p=19032#comment-44021 ” Great leaders neither want nor need great boards: they just want people who’ll get out of the way. ”

False. Autocrats don’t want great boards or anyone who could stand in their way.

But great leaders actually seek challenging opinions and accountability for themselves. A really competent board of directors is also the best sounding board a CEO can get.

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By: QCIC http://blogs.reuters.com/felix-salmon/2012/10/18/felix-salmon-smackdown-watch-corporate-governance-edition/comment-page-1/#comment-44009 Thu, 18 Oct 2012 16:51:27 +0000 https://blogs.reuters.com/felix-salmon/?p=19032#comment-44009 Well said KenG.

TO say that the board doesn’t work on behalf of the shareholder is to be confused about what the actual legal structure is.

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By: absinthe http://blogs.reuters.com/felix-salmon/2012/10/18/felix-salmon-smackdown-watch-corporate-governance-edition/comment-page-1/#comment-44007 Thu, 18 Oct 2012 16:26:22 +0000 https://blogs.reuters.com/felix-salmon/?p=19032#comment-44007 Felix, this is largely a well-done mea culpa, but you should really try to avoid the casuistry that got you in this mess in the first place. “After all, when boards do take matters into their own hands, they end up doing things like firing Steve Jobs from Apple.” That sentence makes no sense whatsoever – I can think of no other event “like” that one. Likewise, the strength of Justin’s response is not in the cases he mentions, but in the aggregation of the literature he cites.

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By: KenG_CA http://blogs.reuters.com/felix-salmon/2012/10/18/felix-salmon-smackdown-watch-corporate-governance-edition/comment-page-1/#comment-43997 Thu, 18 Oct 2012 13:13:42 +0000 https://blogs.reuters.com/felix-salmon/?p=19032#comment-43997 The board does have to answer to the shareholders, not that they ever hold them accountable. And while their responsibility is not just to maximize profits (just like it isn’t for management), they are selected by shareholders to make sure the corporation is run correctly. They have a responsibility to customers, suppliers, and shareholders to make sure the management doesn’t screw up – directors often get sued by shareholders when they don’t provide enough oversight of the management.

To say the board “isn’t responsible” to the shareholders is like saying Congress isn’t responsible to the people in the U.S.. Congress answer to the voters, and while voters think congress should act in the best interests of their specific district, Congress is supposed to do what they think is best for the entire nation. Just like the board is supposed to do what is best for the corporation. And they answer to the voters/shareholders.

And why play semantics when it comes to ownership of the corporation? While there’s no doubt management of most publicly traded corporations runs them for their own benefit, the shareholders DO own the corporation. If you own enough shares, you get to do whatever you want with the company. If you own enough shares, you get to specify what to do with the profits. When you own shares, you own a piece of the company; that it gives you no well-defined stake in the earnings is not different than no one voter being able to specify how the government is run. If enough shareholders band together, they can get a well-defined stake in the earnings, if that’s what they want.

For extreme examples of how shareholders own the corporation and directors act responsible to them, look at any VC-funded start-up. The board often micro-manages executives, and ensures that management does what the majority of the shareholders want the company to do. Those lines between shareholder and corporation only get blurred when ownership gets widely distributed, but they are still there. If institutional shareholders fulfilled their civic duty, there would be much more oversight of publicly traded corporations.

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By: MrRFox http://blogs.reuters.com/felix-salmon/2012/10/18/felix-salmon-smackdown-watch-corporate-governance-edition/comment-page-1/#comment-43986 Thu, 18 Oct 2012 07:29:50 +0000 https://blogs.reuters.com/felix-salmon/?p=19032#comment-43986 “Glamour boy who jump to conclusion sometimes get hair mussed.” (Charlie Chan)

“felixsalmon The Loeb award was nice. But I never truly made it until I was the subject of a Daily Beast Facebook poll. facebook.com/thedailybeast/…
about 1 hour ago · reply · retweet · favorite”

“He who squanders today talking about yesterday’s triumphs, have nothing to boast of tomorrow.” (Chan too)

TaTa, stud.

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