#cirx

CIRX, anche in Austria si inchinano a Gigi Galli con la Kia Rio RX

One of the major problems in our country, with many exceptions, are CEOs -- and our corporations are run in a dysfunctional manner. It’s amazing when you get in there how badly they’re run. And we can get a lot done as activists. During the last few years the market value of the common stock of companies that we were in, amazingly rose $55 billion and they were only $20 billion when we started buying. This certainly helped all shareholders. Often the boards do the opposite of what they should be doing. A board should make management accountable. They often don’t do that, they’re often buddies. They want to go to the Super Bowl ... In the companies that we control, we don’t micromanage. We let the CEO run it, but we keep him accountable at the board level. If the numbers aren’t coming, the board needs to go in and find out why. If there have to be certain changes made, the board needs to do it. It’s hard to do that in a public company. You often can’t get rid of a CEO at a public company, unless I come along with a huge proxy fight.

And shouldn't it be a wake-up call when stakeholders mock the employee whistleblower for being naïve, implying that everyone should know that Goldman is as bad as Smith made it sound?

When I see a business with a board that has a preponderance of people with similar, if not identical, profiles, it is a signal that it is not a healthy business. It is a canary in a mine that says that they are not looking after the fundamentals of the business. Non-diverse boards set my alarm bells ringing because it is good corporate governance and good business sense to have diversity of thought and experience, knowledge and understanding, perspective and age and a reflection of a whole range of a business's stakeholders: customers, employees, investors, and the communities in which they operate. If a board is not diverse, it makes me wonder about the business as a whole.

“That seat could have been held by someone who understood derivatives,” says Ms. Minow. “What we have learned from the financial crisis is that boards of directors have failed miserably in their No. 1 task of risk management. You don’t go on a board for networking, seeking contributions or working for minorities. You go on a board for one purpose — to manage risk for the long-term benefit of the shareholder.”