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Setting the benchmark in corporate integrity

Internal Controls

Energy company Zorlu Enerji set to transform Turkey’s fortunes

Exploring energy derived from domestic and renewable sources sits high on the Turkish government’s agenda, being an area that, if properly exploited, could have a profound impact on the country’s economic fortunes. Turkey’s reliance on imports continues to drain the country’s resources and with this there exists a responsibility on the part of local players to step up and improve upon the investment landscape.

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Michael Woodford, king of whistleblowers

Michael Woodford, the embattled former CEO of Olympus, is being honoured with the inaugural Contrarian Prize today. The new accolade “seeks to recognise individuals in British public life who demonstrate independence, courage and sacrifice”. Woodford has indeed demonstrated all of those traits: he acted independently from the Olympus board, he had the courage to stand up to them, and he sacrificed his career and enormous salary.

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Ecobank CEO denies charges of fraud citing bank’s strong governance policies

The local Securities and Exchange Commission is investigating Nigeria’s Ecobank over allegations of fraud and misconduct. The bank’s governance strategy is under scrutiny after executives revealed the CEO planned to sell some assets below market value. It has also been suggested that executives were encouraged to write-off debt owed by a business owned by Ecobank’s chairman, and to alter the bank’s results for 2012. Investigations began in September after executive director of risk and finance Laurence do Rego denounced CEO Thierry Tanoh and chairman Kolapo Lawson to the authorities.

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Italian banks to “change corporate governance”

Italian banks are too adopt new corporate governance policies in order to improve transparency, limit conflicts of interest and build on capital strengthening. Fitch Ratings has released a statement in which it outlines how financial institutions in the country will build “better governance structures and procedures that foster healthy shareholder participation and enhance management effectiveness” that could support bank ratings.

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PetroChina hit with US lawsuit over corruption

The problems continue to mount for PetroChina, China’s state-owned oil giant, following recent news that a number of senior executives were under investigation for alleged corruption.

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Deutsche ordered to improve internal controls

Germany’s leading bank is set to be forced to improve its internal controls by the country’s regulator BaFin, after it became embroiled in the Libor rate fixing scandal.

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Norway appoints corporate governance board

Having quadrupled in size over the last eight years, the world’s largest sovereign wealth fund has appointed a board of three British corporate governance experts to help expand the fund’s role in the management of its holding companies. Those appointed include Peter Montagnon of the Association of British Insurers, the Financial Times’ John Kay and Lloyds director and former Hermes CEO Tony Watson.

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Just how flexible is the UK employment market?

Employers have a social responsibility to take on and train local young people, rather than taking the “easy option” of employing skilled workers from overseas, a Tory minister has said. In recent media interviews, skills minister Matthew Hancock said businesses that give local youngsters on-the-job training end up with more loyal and motivated workers.

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Boards on their backs

The recent governance controversy at JPMorgan Chase has masked a much larger issue. Regardless of Jamie Dimon’s victory in retaining his dual role as CEO and chairman of the board, the more important failure on display was that of the board of directors itself – a problem that affects almost all of the world’s megabanks.

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Bankia to strengthen its corporate governance

The Spanish banking conglomerate, Bankia has agreed upon a series of measures to better its corporate governance structure. The changes, when enforced, are intended to improve Bankia’s practices to match the equivalent of advanced international standards.

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The many faces of auditing

Both mandatory and discretionary, auditing comes in many guises

1 Integrated

A necessary undertaking for public companies, an integrated audit entails the auditing of both financial statements and internal control over financial reporting. Necessarily conducted by an external auditor, integrated audits are advantageous in that they encourage a holistic approach to the internal auditing process.

2 Performance

Conducted by either an asset manager or an outside firm, a performance audit verifies performance figures with those demonstrated to the public. Beneficial in that a performance audit allows an accurate insight into a firm’s returns.

3 Quality

Quality audits entail the systematic examination of a quality system, undertaken by either an internal or external quality auditor. Quality audits are integral in determining compliance with a defined quality system process and are a necessary requirement in maintaining the ISO quality system standard.

4 Regular health checks

Regular health check audits are carried out for purposes in understanding the present state of a specific project. Primarily conducted by an independent party, regular health checks are intended to further increase productivity or otherwise effectiveness.

5 Energy

Energy audits consist of an inspection, survey and analysis of energy consumption. Largely intended for the bettering of energy conservation, input is often sought to be reduced though without the hindering of subsequent output. Energy audits are largely meant for reducing overheads.

6 Regulatory

Otherwise termed financial, regulatory audits are intended for assessing the legality of processes pertaining to financial operations. Encompassing management, collections and expenditure, regulatory audits seek to determine a true and fair representation of policy and financial management.

Community spirit

Research has shown that companies giving back to the communities in which they work tend to enjoy better long-term results

1 IBM

An organisation famed for valuing innovation and entrepreneurship, IBM helps its employees to give back to the community in the way they best see fit. IBM distributes Activity Kits, each one designed around different volunteering opportunities. For those who want to use their expertise to help educate others, there are kits advising on how to conduct workshops for adults who want to get into the industries IBM operates in. Employees wanting to inspire future generation can use kits to engage children in workshops that see students make anything from paper dog houses to solar-powered model cars. Or those who prefer a more hands-on approach they can volunteer to help in disaster zones.

2 Ford

According to Henry Ford, “A business that makes nothing but money is a poor business”. This inspired Ford’s Accelerated Action Day in 2012, which saw more than 600 employees in American branches step away from their desks to work in local community projects, supported by various charities. Volunteers were dispatched to shelters, schools and family centres, helping to clean, paint and build in their on-going renovation missions. Projects included renovating shelter rooms for the Salvation Army’s centre in Detroit, building houses with Habitat for Humanity and creating therapy rooms for children with the First Step Domestic Violence Program.

3 JP Morgan

JP Morgan engages in many community projects globally, but recent years have seen emphasise focused on improving education on both sides of the Atlantic. Last year they helped to fund Achieve Together, a drive to recruit and inspire good teachers in disadvantaged areas of the UK. The first phase of the programme will roll out later this year, estimating to help 8,000 pupils. 2010 saw the firm launch a $325m initiative to support publically-funded schools in the US. The company granted $50m to community-development financial institutions to support new schools, as well as helping to tackle the financial problems of schools that already have a strong academic track record to keep them afloat.

4 Coca-Cola

5by20 is Coca-Cola’s initiative to empower five million female entrepreneurs worldwide by 2020. The multinational aims to focus its efforts on the small businesses across the world, currently focusing on Brazil, South Africa, the Philippines and India, by providing training with financial resources and mentors to women looking to get ahead in business. Since launching the program in 2010, Coca-Cola claim to have economically enabled more than 131,000 women. As part of the program, a new initiative in Kenya has helped female farmers grow mangoes for locally sold fruit juices, which has in turn helped create sustainable livelihoods around the farms.

5 Johnson and Johnson

As part of Johnson and Johnson’s No More Tears brand’s 50th anniversary, its Clean Water Initiative was launched as a combined effort with non-profit charity Water for People. Operating under the slogan “Because every baby deserves clean water”, the program has aided small, rural communities in ten of world’s poorest countries, including Malawi and West Bengal to tackle water contamination. The charity not only educates communities but also installs sanitation facilities in schools to provide clean water to hundreds of thousands of children.

Corporate Governance Report interviews international migration expert Sophie Barrett-Brown on the value of immigrants to UK corporations

Keeping up with UK immigration rules | Sophie Barrett-Brown| Video

Corporate Governance Report interviews international migration expert Sophie Barrett-Brown on the value of immigrants to UK corporations

Corporate Governance Report interviews international migration expert Sophie Barrett-Brown on the value of immigrants to UK corporations

The value of immigrants to the UK economy | Video

Corporate Governance Report interviews international migration expert Sophie Barrett-Brown on the value of immigrants to UK corporations

Corporate Governance Report interviews CapitaLand CFO Arthur Lang on the impact of corporate governance on Asia's real estate industry and investment

Arthur Lang: How corporate governance has affected Asia’s real estate market | CapitaLand | Video

Corporate Governance Report interviews CapitaLand CFO Arthur Lang on the impact of corporate governance on Asia’s real estate industry and investment

News

Australian government launches mining probe

Australia’s securities regulator is set to launch a probe of the country’s biggest mining companies in a bid to crack down on selective briefings

Eurosif report calls for better ESG engagement

Eurosif release a report that highlights benefits of better shareholder engagement over ESG policies

Gunaxi: Bribe or gift?

The efforts of multinational companies to do business in China is marred by the tradition of Gunaxi – the concept of courting clients and networking that traditionally involves gift giving

A new model for financial reportage

A widely accepted problem of financial disclosure and reportage is that no two institutions use the same methods

Shareholders reject Julius Baer pay report

Disgruntled shareholders at Swiss private bank vote to reject remuneration report at annual meeting

Investors want sustainable reports to be more transparent

Survey finds that a vast majority of investors in Europe find sustainable reporting essential to their investment decisions

A cultural aversion to defined benefit pension plans

Defined benefit pensions come under scrutiny

Carl Icahn gives Apple a boost

Apple’s market value rose by an estimated $17bn after billionaire investor Carl Icahn tweeted his support for the company. Shares have since hit a seven-month high

Health audit ceases force’s IT system

Surrey Police forced to abandon failed multi-million pound computer system

Churchill Mining grants 5.4 million share options

Following what many have perceived to be detrimental legal altercations through the past year, the London-listed mining company has since granted new share options to many of its employees

Attitudes shift towards sustainability reporting

Increased scrutiny from investors and social media means companies are starting to take sustainability reporting more seriously

Pay ratio disclosure leaves directors unconvinced

The SEC’s recent pay ratio proposal has given rise to criticism and suggestions that it is an ineffective way of curbing excessive executive pay

We, the corporations?

Luigi Zingales on the possibility of a mandatory disclosure rule

NSE establishes Corporate Governance Index

The NSE has partnered with the CBi in an attempt to offset perceptions of Nigerian capital markets being riddled with corruption