Tag Archives: SEC

Is The Romney Denial On Bain A Case Study In Corporate Governance?

Mitt Romney has stated that he left Bain Capital in 1999 and had nothing to do with the company after that. However, regulatory filings tell a different story. Is there a corporate governance lesson here?

The Presidential election debate in the US between Obama and Romney has for the past several weeks centered on the latter’s involvement in Bain Capital. The questions that have arisen relate to the actual period during which Romney served at Bain including the precise timing of his departure and therefore by definition what actions of that private equity firm could he or should he be made accountable for.

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Banks Need To Carefully Reconsider Their Approach To Lobbying

History shows that lobbying is extremely counterproductive but it does not appear that banks have learned their lesson.

Lobbying is a permanent feature of the US political and regulatory scene. All industries participate and engage in it but some more than others. The question is, are these industries better off as a result of the often aggressive lobbying of the Congress and regulators? Does lobbying add value to an organization or industry?

The omens are not good.

During the 2000s a very curious thing happened. Three of the biggest industry lobbying groups experienced outcomes that would have been completely at odds with their business objectives. They were the oil industry, the auto industry and the banks.

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Clearing The Bull on the Financial Crisis – Part I

We can never legislate or regulate our way to sustainable banking—the industry needs to adopt a new strategic business model

Déjà vu All Over Again

“They came on in the same old way and we sent then back in the same old way”.

They were the words the Duke of Wellington used to describe the repeated and futile attempts by Napoleon’s Grand Armée to break through the British defenses at Waterloo.

They can equally be used to describe the current prescriptions for the subprime crisis.

We remain mired in the unenviable position where those who know about banking are firmly wedded to the same old solutions, while those who don’t know about banking i.e. some in the mass media and certain politicians, resort to populist rhetoric. Sadly, the debate on the subprime crisis has generated more heat than light.

It is time for something different. However, before we move forward with a new prescription we need to better define the problem.

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