Activist investors and shareholder advisors are opposing new bylaws that prevent dissident director candidates from standing for election. These bylaws would protect incumbents by disqualifying director candidates who receive compensation or expense reimbursement for their candidacy, even if they are open about what and by whom they are paid. Because activist involvement tends to improve company performance, shutting out dissidents does a disservice to shareholders. For more research in this area, please see our page on corporate governance.
Ethical Systems contributor Jeff Kaplan had another great post last week, covering the European Commission’s report on corruption and discussing the merits and demerits of criminalizing conflicts of interest.
A look at ten recent surveys and reports dealing with risk and compliance issues. Three intriguing data points: (1) A survey of compliance officers and general counsels by business advisory firm Alix Partners found nearly one in three respondents said they stopped doing business with certain partners because of concerns related to corruption. (2) A Bank of America survey of chief financial officers found 81% cited as their chief business risk unanticipated labor costs, including those from the Affordable Care Act. (3) The Institute of Business Ethics, looking at more than 1,000 news articles in 2012 and 2013, found reporting on the financial sector comprised 37% of all the articles; the institute concluded a change in business culture is needed if the public is to again trust the finance sector.
Ethical Systems contributor Ann Tenbrunsel spoke on the subject of ethical blind spots as part of Notre Dame’s Ethics Week. “People that think a lot and know a lot about ethics are not necessarily immune to unethical behavior,” she said. For more information on this subject, please see our page on decision making and Jeff Kaplan’s review of Ann’s book.