The Great Debate UK
By Kathleen Brooks. The opinions expressed are her own.
Groupon’s ex-CEO won’t be remembered for his stewardship of the internet deal company, but he is likely to go down in history as writing one of the best and most honest goodbye memos of all time when he was sacked at the end of last week.
Two things in the memo to Groupon employees announcing his departure stand out: humour and honesty. This has to be the best opening line in the history of the departure letter: “After four and a half intense and wonderful years as CEO of Groupon, I’ve decided that I’d like to spend more time with my family. Just kidding – I was fired today.” How many times have we heard CEOs, politicians and other leaders use the “family” card to disguise the fact they have been unceremoniously dumped from their role of authority?
Mason didn’t stop there. Rather than lash out at the decision to replace him he actually agrees with it. He told readers if his firing was a shock then they haven’t been paying attention. Indeed Groupon has been mired in troubles for the last two-and-a-half years; in the last 12 months the share price has fallen a whopping 75%, from nearly $20 per share to just below $5 today. One could argue that Mason should have left sooner, though we have seen other CEOs continue to stay on to the bitter end – think of Dick Fuld at Lehman Brothers or the rotten crew at Enron.
Mason listed the errors he was responsible for that undoubtedly hurt the company’s share price, from using controversial metrics to rate performance that stoked the ire of regulators, to missing growth expectations. Mason was clear: “As CEO, I am accountable,” he wrote.
from The Great Debate:
Banking integrity has become an oxymoron. Top bankers need to change this and take responsibility for tackling ethical issues. For this to happen, every part of the organization – from senior management to human resources managers to those on the trading floor and beyond – should be assessed according to the contribution it makes to promoting ethical values, not just the bottom line.
The investigations into the LIBOR rate-rigging scandal showed how commonplace bribery among dealers had become. For example, between September 2008 and August 2009 a single trader at the Royal Bank of Scotland had made corrupt payments to interbank brokers on 30 occasions, by means of risk-free transactions known as "wash trades."
from The Great Debate:
Iran must now accept or reject a proposal that offers some sanctions relief in return for Tehran’s reducing its stockpile of uranium enriched close to weapon-grade. This hopeful note – Tehran’s reaction was positive – comes as a showdown looms, because Iran continues to inch ever closer to being able to make a nuclear weapon.
from The Great Debate:
Israeli Prime Minister Benjamin Netanyahu claimed last week that new second-generation centrifuges, which Iran plans to start up at its Natanz uranium enrichment facility, could cut by a third the time needed to create a nuclear bomb – underlining his deadline of this summer to take military action against Iran.
Netanyahu’s prediction, however, appears to be based on some unsubstantiated assumptions regarding Iranian intentions and capabilities. Yet it can provide ammunition to the hawks in Washington and Jerusalem, who could rush us into another needless and counterproductive war in the Middle East. Netanyahu’s assertions do not stand up to technical scrutiny.
from The Great Debate:
Big banks -- at least in Europe -- are putting on a new, highly branded, and more contrite face. Barclays is embarking on something it calls “Project Transform”’; Deutsche Bank has announced its “2015+” strategy and is pushing for what its CEO has called “deliberate” “uncomfortable change”. UBS has its own 2015 strategy, and the head of its investment banking unit publicly proclaimed that the industry has become “too arrogant, too self-convinced”.
Should we buy any of this? William Cohan, for one, isn’t a fan of Barclays CEO Anthony Jenkins’s “new morality”. Cohan’s right to point out that all of this hat-in-hand talk comes after a long period of transgression at Barclays:
By Kathleen Brooks. The Opinions expressed are her own.
The developing horse meat furore is a keen reminder how companies need to always be on the lookout for the next big scandal that could rock their business. Take Findus, the frozen food company. It’s 100% beef lasagne, it turned out, was 100% beef free. The company who owns Findus –private equity firm Lion Capital – spent GBP 1.1 billion acquiring the firm in 2008.
The numbers may have added up when Lion did its analysis prior to the sale, but in hindsight it would have been more expedient to check the supply chain and ensure that Findus did what it said it did on the pack. The Findus brand has been in financial trouble for some time, including breaching debt covenant deals last year. However, through a complicated debt-to-equity deal with some of its lenders, Lion managed to hold onto the business. Maybe the effort wasn’t worth it. Lion will have to fight hard to dissociate its image form dodgy processed food companies flogging horse meat dressed up as beef to the unsuspecting consumer.
–Laurence Copeland is a professor of finance at Cardiff University Business School. The opinions expressed are his own.–
Modern wars have no clear start and no clear end, leaving politicians free to deny their existence when it suits them and to claim victory even in the face of obvious defeat.
from Jack Shafer:
Disgust, the gag reflex and flights to the vomitorium greeted this week's news that horse flesh had breached the beef wall to contaminate burgers and frozen beef meals (lasagna, spaghetti Bolognese, shepherd's pie, meatballs) all over Europe. Some of the "beef" products contained 100 percent horsemeat, and early forensic tests hinted that the contamination might go back as far as August 2012.
Both the British government and the European Union called for "horsemeat summits" to investigate the food scandal, with British officials surmising that a criminal conspiracy would be found responsible for adulterating beef products with cheaper horse. But for all the horsemeat hysteria recorded and amplified by the press, "no risk to consumer health" was posed by the products, as the Food Safety Authority of Ireland reported. The injuries from eating horsemeat were not physical, they were psychological, and where they were not psychological they were anthropological, or else simply nonexistent. According to the Ireland health authority, every beef-and-horse burger it analyzed tested negative for phenylbutazone, a common horse medicine that's banned from the food chain.
–Darren Williams is European Economist at AllianceBernstein. The opinions expressed are his own.–
Cyclical indicators have improved, but the economic and financial backdrop in the euro area remains fragile. The ECB has clearly learned from past mistakes and is keen to avoid a premature tightening of monetary conditions.
from John Lloyd:
Earlier this week the British Parliament housed a restrained, sometimes mawkish and at times moving debate on gay marriage – and the bill passed the House of Commons, 400 to 175. The story was not that it passed, which had been expected. Instead, it was the split in the major governing party, the Conservatives, more of whose 303 MPs voted against the bill than for it. (Conservatives voted 136 in favor of the bill, with 127 voting no, five abstentions and 35 not registering a vote.) Prime Minister David Cameron, still intent on ensuring that his party is liberal as well as conservative, was emollient and understanding of those against the measure but presented his support in the context of a “strong belief in marriage. … It’s about equality but also about making our society stronger.”
His remarks signal that while there is division on the right over gay marriage – at least in Europe –and that while prejudice and bigotry still exist, the serious debate is between contending notions of conservatism. For liberals like Cameron and many in his party, gay marriage extends the benediction of an ancient rite upon modern couples, drawing them into the rituals of homebuilding and long-term affection that have so far been claimed as a heterosexual monopoly. For opponents, marriage must be just such a monopoly, since it is a union of one man and one woman for the purpose (if not always the practice) of procreation, of continuing society’s values in particular and the human race in general.