An (unnecessary) debate has begun about the right of Board members to access data in excess of what management provides, if necessary. We can and should discuss the form of potential abuses and its punishments, as well as reasonable boundaries of access to management and data. But we should not seek to remove a basic right of the Board members, who are personally liable for their decisions.
Two noteworthy articles and one notable initiative in Brazilian CG practices nowadays. One regards an already-missed opportunity, the others still have potential (but should be treated with priority by investors interested in improving Brazilian capital markets).
Two quick articles: a relatively thorough article in the Financial Times about Brazil’s construction and infrastructure boom in the next few years, and a cautionary tale about things that “happen all the time” – until they don’t.
Meet the “zombie funds”: funds that suspended redemptions in the 2008 meltdown and are yet to liquidate, despite holding some $50 billion in assets. A NYT article discusses the problem and possible legal strategies.
Dealbook.com’s guest columnist, Andrew Pincus, defends arbitration as an option to class-action lawsuits and discusses a recent US Supreme Court decision that will make it easier for arbitration clauses to prevent class-action lawsuits. One never wishes to be in such a situation, but the devil is always in the details… In the end, that great Buffett axiom “risk comes from not knowing what you’re doing” does include “risk comes from not reading what you sign”.
Transparency, governance and accountability are two of the main issues I am concerned with regarding politics, government and society in general. I have discussed it here in terms of citizen initiatives such as Wikileaks and its offspring, but governments can also try to push it in that direction. We’ve seen a recent push in Brazil, […]
The agenda for the 2012 Rio Investors Day conference is now online, and I will cover both days of the event next week (Monday and Tuesday). The “single track” design favors breadth over depth, but given the intended audience it’s probably for the best. All in all it’s a great initiative and a well-organized event. Check back next week for the notes!
A Project Syndicate article argues – correctly – that Brazil’s recent progress was not due to major improvements in its legal structure or security of contracts. More importantly, it diagnoses that these things will have to improve if we are to reach the “next level”. While infrastructure is also vital, again the Argentina example highlights security of contract as just as vital and sometimes forgotten.
Fair and balanced look at the NetJets vs. IRS case by NYT’s Dealbook. While the amounts involved are not that relevant for Berkshire, they are quite relevant for their bizarre “nature”: the charge wasn’t there, now it’s there – and retroactive… A warning about tax codes, and not just the USA’s.
The Crowdfunding Act has passed a vote in the US Senate. It allows people funding companies directly to finally become owners, as compared to models such as KickStarter that are “donation”-based – you can get rewards, but not ownership. While we’re definitely seeing more of a start-up culture in Brazil, it is still way too hard to do anything new here