Gustavo Ballvé on January 22nd, 2015

McKinsey & Co’s new article on “Confronting corruption” seems tailor made for the current Brazilian news cycle. How about avoiding corruption? It is impossible for a huge company to control every worker everywhere and all the time, right? Yes, but any company can mitigate the risk by avoiding incentive systems and a corporate culture that favors “shortcuts”. I mention a Harvard Business School course I attended in December 2013 and link to various sources on this subject.

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Gustavo Ballvé on January 13th, 2015

Back in March 2014 we published our 4Q13 management report containing a special section discussing Proxy Advisory Firms. It was motivated by further research following a June 2013 post on Buysiders.com called “Proxy Advisory firms: use with caution”. In the original post I highlighted “the dangers of “outsourcing research” – be it in Corporate Governance, people, financials, business models, competition, whatever – and the temptation of trying to systematize/quantify an investigation that is, by nature, subjective and case by case.” In the excerpt inside I addressed this part in detail but also mentioned “the fundamental choices we should make in terms of capital allocation (be it financial or human).” We can choose how we do our research, and we should choose wisely. For us the choice is clear.

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Gustavo Ballvé on January 7th, 2015

I get repetitive about the number one issue at my mind at any given time: how do I know if and when I know something? How to distinguish superficial from deep knowledge – and what to do to get from one to the other? I have posted this before and allude to it every now and then, and so does the brilliant Shane Parrish at uber-source Farnam Street Blog. His post on Richard Feynman’s famous TV special focuses on the part of truly knowing something.

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Gustavo Ballvé on January 5th, 2015

A Financial Times story today highlights what is certainly a top-3 item on value investors’ wishlists: raising permanent capital. The compliance, corporate governance and incentives challenges are immense, but every investor thinks at some point that they could make it work for them and their clients – as the potential benefits of a truly long-term investment horizon could outweigh the risks/ unintended consequences incurred.

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