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EDGEvantage

intelligence, from the edge of corporate direction

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strategy
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http://www.edgevantage.co.uk/categories/category.asp?show=1&name=strategy

PLENTY OF NOTHING - IN US DIVIDEND TAX CUT PROPOSAL, MCKINSEY SAYS
The consultants at McKinsey chose Shakespeare, not Gershwin, for their metaphor on the value of the proposed move in the US to end taxation of dividends. It was an initiative of the Bush administration that caused a big flurry of comment and anguish that was really "Much Ado About Dividends", they s...
http://www.edgevantage.co.uk/categories/article.asp?i=1249

Corporate social responsibility
THE QUESTION IS: 'NOT WHETHER, BUT HOW'
This statement came from the Centre for Marketing at London Business School, and not from the mouth of a non-governmental organization, a government ministry or a consultant looking for cash. For companies in industries like pharmaceuticals, corporate social responsibility is simply on the ...
http://www.edgevantage.co.uk/categories/article.asp?i=1282

PAY FOR PERFORMANCE – WHY IT MAY NOT WORK
Performance-based pay is a tool-tending-toward-mantra in both the private and public sectors. It aligns the attitude of the workforce with those of the organization, and in the case of corporations with the interests of owners, right? Maybe. ...Michael Beer... and colleagues at Harvard Business Scho...
http://www.edgevantage.co.uk/categories/article.asp?i=1285

COMPETITION IS GOOD FOR YOU (LIKE SPINACH)
As we all learned at one time or another, marketing is about creating a defensible niche, a space where there is, in essence, no competition, where we have a monopoly in the mind of the buyer. One that will make him willing to pay us more than it costs us to produce. The more defensible the position...
http://www.edgevantage.co.uk/categories/article.asp?i=1287

TRADING BY INSIDERS IS A GUIDE TO CORPORATE DECISIONS, TOO
That's the conclusion of a study that shows that managers often hold contrarian views about the value of their companies, and that they use those views in both their personal investments and their corporate decisions. It's not, on a surface a surprising result, and that's reassuring: an industry of ...
http://www.edgevantage.co.uk/categories/article.asp?i=1288

OUTSOURCE YOUR IDEAS
The striking advertising campaign from Accenture – "I am your idea…" – exorts us to innovate, not just invent. To have ideas and exploit them. Well, what if you're fresh out of ideas? Or what if the ideas you have need ideas from outside to make them commercial? The folks at Accenture's ...Institute...
http://www.edgevantage.co.uk/categories/article.asp?i=1281

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governance
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http://www.edgevantage.co.uk/categories/category.asp?show=2&name=governance

EU COMMISSION DRAWS LINE IN SAND OVER GOVERNANCE
...Company law is moving right up to the top of the EU agenda. It was bound to happen. The European Union’s response to the crisis of confidence following Enron, WorldCom, Ahold and others, hasn’t been as rash or sweeping as in the US. But the Commission, in a policy paper for the Council of Ministe...
http://www.edgevantage.co.uk/categories/article.asp?i=1271

FAQs ON EU COMMISSION'S GOVERNANCE IDEAS
The European Commission also put together a readable summary of its ideas on an umbrella model for corporate governance codes in the area. These frequently asked questions include things like: Q. Won't all this just mean more red tape for businesses?...
http://www.edgevantage.co.uk/categories/article.asp?i=1273

For your bookmarks
AROUND EU, CORPORATE GOVERNANCE CODES PROLIFERATE
Here's a link ...
http://www.edgevantage.co.uk/categories/article.asp?i=1272

Higgs review
FRC DELAYS IMPLEMENTATION, SETS UP WORKING PARTY
The Higgs review of the role of non-executive directors in the UK has, to use a rugby metaphor, been kicked into touch. That doesn't mean the game is over, as rugby fans will know. Merely that the opposing teams will catch their breath and line up a bit farther down the field to resume combat. Follo...
http://www.edgevantage.co.uk/categories/article.asp?i=1305

Higgs review
ASSET MANAGER EXPECTS COMPANIES TO 'MOVE IN LINE OVER TIME'
http://www.edgevantage.co.uk/categories/article.asp?i=1247

Shareholder activism
WHO PAYS FOR GOVERNANCE?
The headhunters at Spencer Stuart hosted a roundtable on corporate governance, shareholder activism and the role of institutional investors. One of the questions that came up was, "Who pays?" It's a good question, and one that legislators and regulators may not always bother to ask. The speakers cam...
http://www.edgevantage.co.uk/categories/article.asp?i=1264

DOES NYSE GOVERNANCE POINT TOWARD A 'GERMAN-STYLE' BOARD?
...The issue came up during a workshop at the annual conference of the German investor relations federation DIRK. Officials from the ...New York Stock Exchange... made an interesting case for convergence in governance worldwide. Despite all the talk about how much more prescriptive new US regulation...
http://www.edgevantage.co.uk/categories/article.asp?i=1270

Executive pay
GERMAN PANEL WANTS INDIVIDUAL DIRECTOR PAY DISCLOSED
It was bound to happen sooner or later. Indeed, the Justice Ministry was threatening action if self-regulation failed. On May 21, the ...Cromme Commission... that drafted the German code of corporate governance now wants corporations to disclose the pay of individual members of the supervisory and m...
http://www.edgevantage.co.uk/categories/article.asp?i=1268

KEY TO GOOD GOVERNANCE: 'FOLLOW THE MONEY'
"Follow the money," Deep Throat told the reporter Bob Woodward when his Watergate investigation stalled. Maybe funding, too, is the key to making boards of directors work better. ...An article on the ...Harvard "Working Knowledge"... website argues that as boards become more independent they really ...
http://www.edgevantage.co.uk/categories/article.asp?i=1265

Executive pay
WHAT'S A (NON-EXECUTIVE) DIRECTOR TO DO? MORE HOURS, MORE PAY
One of the repercussions of the tighter scrutiny of the work of boards of directors is that candidates for board jobs are getting pickier. Being a board member is a lot more work than it used to be. An article we saw recently from two recruitment consultants specialized on board matters, noted that ...
http://www.edgevantage.co.uk/categories/article.asp?i=1263

BOARDS MUST PROVIDE A COMPANY'S 'MORAL DNA'
That's the view of William Donaldson, the new chairman of the US Securities and Exchange Commission. Indeed, he told the Economic Club of New York, it's probably the most important responsibility of the board. "In humans, DNA encompasses the very building blocks of life and determines or influences ...
http://www.edgevantage.co.uk/categories/article.asp?i=1257

HARVARD PROFESSOR ARGUES AGAINST SHAREHOLDER VALUE AS KEY BOARD AIM
What is the role of the board of directors? Is it to maximize shareholder value? And how, given the (limited) range of tools at its discretion, can it achieve that? Constance Bagley, a professor at Harvard Business School, issued a working paper in which she argued that the role of the board, in (US...
http://www.edgevantage.co.uk/categories/article.asp?i=1248

Executive pay
IT'S A BUYER'S MARKET, SO WHY ARE BOARDS SO BAD AT BUYING?
"We took Tom out of the American market, and there is a market rate," the chairman said. This is the excuse we've heard repeatedly, for years, about why the pay of chief executives keeps going up, independently of the economic cycle. A few weeks ago, we complained that the institutions were...
http://www.edgevantage.co.uk/categories/article.asp?i=1196

About us …
SPECIAL ACADEMIC SUBSCRIPTION RATE FOR EDGEvantage
Budgets are especially tight for folks working in universities. So we've set an EDGEvantage subscription rate just for full-time academics and students who are interested in keeping abreast of issues in corporate strategy, governance, communication and financial regulation. It's less than half the r...
http://www.edgevantage.co.uk/categories/article.asp?i=1170

Sarbanes-Oxley
COST OF COMPLIANCE IS STAGGERING - DAIMLERCHRYSLER CFO
The Sarbanes-Oxley Act is meant to restore investor confidence in financial markets by threatening large penalties, including prison, for CEOs and CFOs who fail to comply. But how much value is being lost to shareholders by the attempts to satisfy the strictures of the law? Manfred Gentz, chief fin...
http://www.edgevantage.co.uk/categories/article.asp?i=1267

INTEL HOLDERS VOTE IT DOWN, BUT FASB WANTS OPTIONS TREATED AS EXPENSES
The annual meeting of Intel Corp was an occasion to test the resilience of lost causes. Shareholders narrowly defeated a motion demanding the Intel immediately account for all its executive options are expenses. Everyone called it a victory: management and its supporters got the majority they wanted...
http://www.edgevantage.co.uk/categories/article.asp?i=1297

Risk management
GREENSPAN SAYS WEAK RISK MANAGEMENT, NOT DERIVATIVES, IS THREAT
Following the corporate scandals of 2002, everything that comes close to falling off the balance sheet is under scrutiny. Regulators around the world are looking at derivatives markets to see if risks are in hiding that could cause new problems. Alan Greenspan, chairman of the ...US Federal Reserve ...
http://www.edgevantage.co.uk/categories/article.asp?i=1303

Auditor independence
SEC ISSUES RULES ON HOW ISSUERS SHOULD COMPORT THEMSELVES
One of its Sarbanes-Oxley duties was to tell issuers not to bully their auditors. And the ...US Securities and Exchange Commission... has done that in a new final rule on "Improper Influence on Conduct of Audits". Among the conclusions: "These rules prohibit officers or directors of an issuer, or pe...
http://www.edgevantage.co.uk/categories/article.asp?i=1302

HOW IS THE GERMAN GOVERNANCE CODE WORKING?
It’s been a bit more than a year now since German companies were required to comply with the country’s corporate governance code or explain why not. With a year’s worth of declarations in hand, the ...Berlin Center of Corporate Governance... at the Technical University looked at 99 statements from t...
http://www.edgevantage.co.uk/categories/article.asp?i=1269

Auditor independence
FEE WANTS LEVEL EU PLAYING FIELD AS NEW AUDIT RULES TAKE FORCE
The European Federation of Accountants (FEE) is worried about uneven implementation of new rules to govern the audit profession. The European Commission has issued broad ...guidance on corporate governance... across the European Union, and including audit standards. David Devlin, president of FEE, ...
http://www.edgevantage.co.uk/categories/article.asp?i=1298

Auditor independence
ICAEW ISSUES GUIDANCE FOR UK AUDIT COMMITTEES
In the wake of the Smith Report in January, the ...Institute of Chartered Accountants in England and Wales... wants to help non-executive directors, particularly the non-financial experts among them, understand when they've got themselves into. Four new documents will assist audit committees deal wi...
http://www.edgevantage.co.uk/categories/article.asp?i=1295

Stock options
GERMAN ASSET MANAGER TAKES TOUGH LOOK AT OPTION PLANS
Union Investment is one of the biggest fund management shops in Germany, with a history of activism. So during a time when stock options are undergoing such close scrutiny, it's not surprising to see Union taking a close look. What is surprising is the decision to show the analysis in public. ...
http://www.edgevantage.co.uk/categories/article.asp?i=1275

Executive pay
HOW MUCH WOULD GLAXOSMITHKLINE CEO GET ON TERMINATION?
http://www.edgevantage.co.uk/categories/article.asp?i=1291

Proxy voting
UK ASSET MANAGER PUBLISHES VOTING RECORD IN FULL
http://www.edgevantage.co.uk/categories/article.asp?i=1278

Corporate social responsibility
UNIVERSITY OFFERS SCHOLARSHIPS FOR CSR-FOCUSED MBA COURSE
http://www.edgevantage.co.uk/categories/article.asp?i=1280

DAI CONFERENCE LOOKS AT SUPERVISORY BOARDS IN ACTION
http://www.edgevantage.co.uk/categories/article.asp?i=1274

Sustainable development
PARIS INVESTOR CONFERENCE FOR SOCIAL INVESTMENT
http://www.edgevantage.co.uk/categories/article.asp?i=1259


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responsiveness
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http://www.edgevantage.co.uk/categories/category.asp?show=3&name=responsiveness

EU financial regulation
AIMR PANEL SEES 'TOO MUCH DETAIL, TOO LITTLE FLEXIBILITY'
The European Union's Market Abuse Directive will set new hurdles for the securities industry and give investors a greater level of confidence that trading will be fair. The ...Association of Investment Management and Research... is among the organizations that want to see the directive succeed. But ...
http://www.edgevantage.co.uk/categories/article.asp?i=1256

Hedge funds
SEC ROUNDTABLE AIRS VIEWS HOW TO REGULATE LEVERAGED FUNDS
The US Securities and Exchange Commission isn't looking to kill the hedge fund industry, but it is looking into how they operate. At a two-day roundtable meeting, William Donaldson, the new SEC chairman, said the funds are a valuable part of the investment landscape that does and will play a role. T...
http://www.edgevantage.co.uk/categories/article.asp?i=1254

Hedge funds
TRANSCRIPTS OF THE SEC ROUNDTABLE
http://www.edgevantage.co.uk/categories/article.asp?i=1301

Hedge funds
SEC WILL CONSIDER MORE TRANSPARENCY – DONALDSON
http://www.edgevantage.co.uk/categories/article.asp?i=1300

About us …
DIRK MEMBERS CAN GET DISCOUNT SUBSCRIPTION TO EDGEvantage
Members of the German investor relations group DIRK can subscribe to EDGEvantage at a discount. ...Click the link below... to access the subscription form, then send it by post or fax to us. Once we verify your DIRK membership, we'll sign you up and send you a temporary password. ...Why not provide ...
http://www.edgevantage.co.uk/categories/article.asp?i=1252

UK MAKES PLANS FOR LAUNCH OF TREASURY SHARES
Treasury shares are a pretty simple concept, and one much used in the US. When a company buys its own shares in the market, it holds on to them. Maybe uses them to issue to employees against option plans, or just sells them into the market on a good day to raise capital (subject, of course, to speci...
http://www.edgevantage.co.uk/categories/article.asp?i=1253

Analyst objectivity
SWISS ANALYST GROUP LAUNCHES BENCHMARKING INITIATIVE
One problem professional investment analysts face is the lack of any systemtic evalation of their contribution. Sure, there are league tables and beauty contests that often help steer sell-side analysts' pay. But it's hard for buy-side firms to value research (or know how to pay for it, as we're lea...
http://www.edgevantage.co.uk/categories/article.asp?i=1258

Analyst objectivity
AND THE PAY IS NOT SO GOOD, EITHER
It's been tough to be an analyst in the past year, especially in the US. With the New York Attorney General and the Securities and Exchange Commission breathing down your necks and the market still finding a bottom, who would want to be an analyst? ...Well, at least the money's good. Or is it? The ....
http://www.edgevantage.co.uk/categories/article.asp?i=1255

FRENCH REGULATORS LOOK INTO USE OF DERIVATIVES
The two main French securities regulators, COB and CMF, have launched a pubic consultation on capital-raising measures that involve the use of derivatives. Separately, COB organized a quick look into the use of derivatives in share buyback programs. The latter consultation closes on June 2, but ther...
http://www.edgevantage.co.uk/categories/article.asp?i=1304

Sustainable development
HOW IMPORTANT IS SUSTAINABILITY FOR SHAREHOLDER VALUE?
In the opinion of corporations, it’s a very open question. The ...German Share Institute... set about to answer it in a study conducted by the Institute for Ecology and Corporate Leadership at the European Business School in Frankfurt. The results were, well, mixed. Just under half the 100 companies...
http://www.edgevantage.co.uk/categories/article.asp?i=1279

About us …
SPECIAL EDGEvantage OFFER FOR INVESTOR RELATIONS SOCIETY MEMBERS
Members of the London-based Investor Relations Society can subscribe to EDGEvantage at a discount. The application form for this special offer is on the IRS website in the members zone. Why not provide EDGEvantage to the whole IR department and related disciplines like company secretaries, strategi...
http://www.edgevantage.co.uk/categories/article.asp?i=1169

Analyst objectivity
AND WHAT ABOUT 'PAID-FOR' RESEARCH?
One of the outcomes of the shake-out on the sell-side has been the increasing difficulty for small- and mid-cap companies to get any sort of analyst coverage. On both sides of the Atlantic, there's been a growing sentiment that, just maybe, a company ought to pay to have its stock analyzed. It's no ...
http://www.edgevantage.co.uk/categories/article.asp?i=1294

Analyst objectivity
NIRI, AIMR PLANS JOINT TASK FORCE ON ISSUER-ANALYST RELATIONS
It was bound to happen, and we're glad it did. In the long debate over analyst objectivity that culminated in $1.4 billion in fines and free against the sell-side firms in the US, the analysts had a running, plaintiff complaint. If they were more objectivity, would issuer retaliate? In the news rele...
http://www.edgevantage.co.uk/categories/article.asp?i=1293

IR best practice
HOW TO MEASURE THE VALUE OF INVESTOR RELATIONS
...The link between shareholder value and the money spent on investor relations has always been a tenuous one. No more so than marketing spend, charitable contributions or the staff picnic. But because investor relations sits under the gaze of the finance director, it probably comes under a sharper,...
http://www.edgevantage.co.uk/categories/article.asp?i=1266

CANADIAN ACCOUNTANTS ISSUE NEW OFF-BALANCE SHEET GUIDANCE ON MD&A
http://www.edgevantage.co.uk/categories/article.asp?i=1299

Corporate social responsibility
WHAT DO YOU SAY TO SOCIALLY RESPONSIBLE INVESTORS?
http://www.edgevantage.co.uk/categories/article.asp?i=1261

FRENCH REGULATOR WISHES FAREWELL TO A SAD YEAR
http://www.edgevantage.co.uk/categories/article.asp?i=1262

IOSCO CONFERENCE IN SOUTH KOREA RESCHEDULED
http://www.edgevantage.co.uk/categories/article.asp?i=1234

IR best practice
DIRK PUBLISHES STUDY OF CRISIS COMMUNICATION
http://www.edgevantage.co.uk/categories/article.asp?i=1242