The Economist (February 15, 2014)
“Rule changes have made activism easier and therefore more commonplace. Nor is it restricted to America: shareholder activism is gaining in popularity around the world, in places such as Japan and continental Europe, where it was once unknown.” While there are instances where activists cause damage in pursuit of short-term gains, “recent academic studies suggest that, by and large, activists are good for companies. An analysis of around 2,000 interventions in America during 1994-2007 found not only that the share prices and operating performance of the firms involved improved over the five years after the intervention, but also that the improvement was greatest towards the end of the five-year period.”
Tags: Activists, Europe, Improvement, Japan, Performance, Popularity, Rules, Share prices, Shareholders, Short-term gains
The Economist (October 5)
“The prime minister is right to raise the consumption tax, but must do more to boost Japan’s growth.” It is time for the third arrow. These major reforms should “include radical proposals to consolidate farmland, increase competition in the provision of health care and ease the rules on hiring and firing.”
Tags: Competition, Consumption tax, Farmland, Firing, Health care, Hiring, Japan, Prime minister, Reforms, Rules, Third arrow
Financial Times (August 19)
Auditors bear some blame for the financial crisis, yet little has been done to improve the quality of their audits. The Public Company Accounting Oversight Board (PCAOB) has now proposed more detailed disclosure to highlight items of concern, even when a company passes the audit. “The Securities and Exchange Commission, which has the final say, should adopt the PCAOB’s proposal. This would match similar rules passed by the UK’s Financial Reporting Council…. Pass-fail cannot distinguish accounts that pass with flying colours and those that barely scrape by. Investors deserve better – and investors are auditors’ true constituency even if managers are their employers.”
Tags: Auditors, Audits, Disclosure, Financial Crisis, Financial Reporting Council, Investors, Pass-fail, PCAOB, Quality, Rules, SEC, UK
New York Times (July 11)
“With two bad rules adopted on Wednesday, the Securities and Exchange Commission has all but invited hucksters, rip-off artists and other bad actors to prey on individual investors. The new rules are another disturbing sign that under the leadership of the new chairwoman, Mary Jo White, the S.E.C. will pursue deregulation at the expense of investor protection.”
Financial Times (August 23)
The SEC’s decision on conflict minerals and disclosure of payments to host governments “was long overdue” and “Despite the grumbling, most companies will benefit from a cleaner industry. The SEC has contributed to that. The EU must follow suit with equally comprehensive rules.”
Tags: Conflict minerals, EU, Payment disclosure, Rules, SEC
