Category Archives: Investor relations

Which is the tail and which is the dog?

“CBS Board Defies Shari Redstone,” The Wall Street Journal, May 18, 2018 B1.  Board tries to reduce the control exercised by an 80% shareholder.

This is going to be fun to watch (if you’re not one of the other shareholders).  Interesting question on what the controlling shareholder (and the Board) can and cannot do.

Here’s a subsequent post from another source, if you want background.  Caution – heavily legal.

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Filed under Board, Controls, Corporation, Directors, Duty, Governance, Internal controls, Investor relations, Oversight, Shareholders, Who is in charge?

Another ½ billion

This may appear to be more a straight compliance piece than an information governance piece, but consider that the officers and directors didn’t know or didn’t report things that they should have known about.  Truth or consequences?

“Wells Fargo Reaches Settlement In Lawsuit,” The Wall Street Journal, May 5, 2018 B10. Tentative settlement in suit alleging certain “current and former officers and directors of the bank had made false statements” affecting the stock price between 2014 and 2016.

The final paragraph of the article says,

The bank said Friday that it “denies the claims and allegations in the action and entered into the agreement in principle to avoid the cost and disruption of further litigation.”

One pauses to wonder if the current shareholders agree, it being their $480 million being spent to resolve the lawsuit, not the $480 million of said certain current and former officers and directors.  This is on top of the $1 billion fine paid last month.  Hopefully, the current and former shareholders will get some of the $480 million, less legal fees.

Telling fibs in connection with a company’s stock price can be real expensive for some one.  Not knowing about abusive sales practices is about the same as lying.  And how can you deny something yet still pay $480 million?  Who are they trying to fool this time?  At least now they can post nice ads on TV, claiming a re-invention.  Has the culture problem been fixed?

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Catching up

I was out of town for a bit, and am now catching up  So this will deviate from the usual one-story, one-post format.  19 squibs.

“ISS Opposes Five Equifax Directors,” The Wall Street Journal, April 17, 2018 B2.  A proxy advisor recommends against voting for members of the Board’s technology committee, who had responsibility for technology security.  Is that all that happens, they get fired?  157 millions accounts exposed and they get un-elected but not (yet) sued?  No claw-back of director’s fees?

“Facebook Data Dispute Embroils University of Cambridge,” The Wall Street Journal, April 16, 2018 B4. Cambridge says Facebook approved of the University’s use of Facebook data.  Or your data, if you wish.

“Fired FBI No.2 McCabe Misled Probe, Report Says,” The Wall Street Journal, April 14, 2018 A1.  Misleading an internal investigation into leak to the newspaper is not good.

“Volkswagen Prepares to Replace CEO, The Wall Street Journal, April 11, 2018 B1.  CEO who help VW survive the emissions scandal gets replaced. A palace coup after the company spent $25 billion+ on the scandal.  Is this more price for VW to pay?  And let’s not forget the shareholders, who foot the bill.  See also “VW Picks Chief After Boardroom Coup,” The Wall Street Journal, April 13, 2018 B1.

“Blunder Hits Samsung Securities,” The Wall Street Journal, April 11, 2018 B13. An employee’s mistake leads to mistaken issuance of $105 billion in shares, more than 30 times the company’s existing issued shares.  Do you have the right controls in place?  Is this an information governance issue?

“Facebook Hearings Put Regulation In Spotlight,” The Wall Street Journal, April 12, 2018 A1. Will the Facebook data leak/usage lead to new privacy regulation?

“Adviser Urges Shift On Board Of Equifax,” The Wall Street Journal, April 12, 2018 B10.  Does the company’s failure to avoid a cyber attack mean the board has to go?  Maybe.

“China’s Censors Zero In on Apps,” The Wall Street Journal, April 12, 2018 B4.  Chinese government extends control over a smartphone app that had crude jokes.  Now there’s enforcement of a policy, and a demonstration of what “governance” means.

“Zuckerberg Says Sorry for Harm Done,” The Wall Street Journal, April 10, 2018 B4.  Classic crisis management strategy:  admit you’re wrong?

“Sensing Urgency, Facebook Bolsters User Protections,” The Wall Street Journal, April 10, 2018 B5.  Locking the door after the horse bolted.

“Facebook Sets ‘Issue’ Ads Rule,” The Wall Street Journal, April 7, 2018 A1.  Does a background check on advertisers protect your privacy?

“YouTube Policies Stir Bitterness,” The Wall Street Journal, April 6, 2018 B1.  Following attack at YouTube HQ, taking a closer look at YouTube’s policies on filtering/restricting content.

“Facebook CEO: Lax Privacy a ‘Huge Mistake,'” The Wall Street Journal, April 5, 2018 A1.  Not focusing on privacy protections a “huge mistake.”  Really?

“Police Want to Send AI Into the Street,” The Wall Street Journal, April 4, 2018 A3.  Can body cams be used to collect “Person of Interest”-level information, real time?

“WPP’s Sorrell Faces Probe,” The Wall Street Journal, April 4, 2018 B1.  CEO of advertising company under internal investigation for misusing company assets.  It’s really just a question of duty.

“GM Scraps a Standard in Sales Reporting,” The Wall Street Journal, April 3, 2018 B1.  You manage what you measure.  So, no longer reporting this statistic will reportedly make it easier to measure performance.  Huh?

“Oracle Defeats Google In Court,” The Wall Street Journal, March 28, 2018 B1. Appeals court revives copyright infringement suit against Google.  $9 billion+ in damages alleged.

“Wedbush Accused Of Flawed Oversight,” The Wall Street Journal, March 28, 2018 B12.  SEC charges company with failure to properly supervise an employee involved in “long-running ‘pump-and-dump’ scheme.”

 

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Filed under Accuracy, Board, Communications, Compliance, Compliance, Compliance (General), Controls, Corporation, Culture, Directors, Duty, Duty of Care, Employees, Governance, Information, Internal controls, Investor relations, Oversight, Oversight, Ownership, Ownership, Policy, Privacy, Protect information assets, Security, Third parties, Value

Man bites dog

“Disney Rebuffed Over Pay For CEO,” The Wall Street Journal, March 9, 2018 B1.  Shareholders refuse to endorse Chairman’s new pay package.

This is really quite large.  Shareholders invest their money and elect a Board of Directors to manage the company.  Normally, shareholders of a large public company have little say in what the Board decides to pay the managers who actually run the company.  Or really any influence at all over anything.  If they like it, they stay.  If not, they sell their shares.

So who is really governing Disney?  The shareholder vote is not binding, but does send a message to the directors.

What is governance?

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Snoopy cried

“Shares of MetLife Plunge on Big Charge,” The Wall Street Journal, January 31, 2018 B16. MetLife needed to increase its reserves after “losing track of possibly tens of thousands of retirees owned monthly pension payments.”  Loses 9% of share value (and this was before the big drop this week!).  This was after they reduced their reserves earlier, resulting in increased revenues.  The day earlier, “Pension Snafu Hits MetLife Results,” The Wall Street Journal, January 30, 2018 B1. A “records mistake.”  Huh?

People have been and will be fired.  Will any senior executives take the hit?  What exactly is the company’s business?  Where was the Board on this?  Do they refund any of their fees?  At least the company admitted a material weakness in its financial systems.  Is the CFO nervous about what he/she signed?  Did the boost affect anyone’s bonus?  Did this affect the market?

This was not a records mistake.  It was a conscious decision.  Who decided to reduce the reserves and just forget about the pensioners who weren’t easy to find?

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Filed under Accuracy, Board, Compliance, Compliance, Compliance Verification, Controls, Corporation, Data quality, Directors, Duty, Duty of Care, Employees, Governance, Internal controls, Investor relations, Oversight, Oversight

Was your ride late?

“Chicago Sues Uber For Lag in Reporting Data Hack,” The Wall Street Journal, November 28, 2017 B4.  Following the disclosure of the year-old breach of 57 million accounts, Uber is sued for consumer fraud and deceptive business practices, among other things.

There is the breach.  And then your response to the breach.  And then the regulators’ and the customers’ and the shareholders’ response to the breach.

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Keeping secrets

“SEC Accuses Long Island Town of Fraud,” The Wall Street Journal, November 24, 2017 B11.  SEC alleges town failed to tell bondholders about special loan deals.  Town feels victimized, as the town board didn’t know of the special deals.

If you have a duty to disclose certain information, and don’t disclose it, that is called either “failure to disclose” or “fraud.”  Or a failure of management.  There are certain things that, as a director, you are supposed to know.

Board members are fiduciaries.

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