Trust Digest 21 (September 23, 2013)


US SEC Proposes Disclosure of CEO-Worker Pay Difference
U.S. corporations will need to disclose how the paychecks of their chief executive officers compare with those of their workers under a new proposal released on Wednesday by a sharply divided U.S. Securities and Exchange Commission.
Key Words: CEO Pay, SEC regulation
Trust Issues: Accountability, Transparency, Regulation

 
Since Lehman’s Collapse, Companies More Forthcoming on Compliance
One major change since the financial crisis is how companies have become more transparent about pending litigation and government investigations. And in response to greater public scrutiny, that has meant committing a lot more money and resources to comply with a host of regulatory requirements.
Key Words: Transparency, Regulation
Trust Issues: Responsibility, Accountability, Transparency, Regulation

 
Hong Kong's Subway System Wants to Run the World
Hong Kong's MTR Corp. is taking its high standards abroad, bidding to run subways in Europe, Asia and Australia. If it wins just a few of the bids, it will become the biggest operator of metro systems in the world. Led by a New Yorker, the company is also considering other projects, including in Germany, another place that puts a high value on efficiency. "MTR in Hong Kong is probably the best-run metro in the world, and that brand is what they bring with them," said Nigel Harris, managing director at the Railway Consultancy Ltd., a U.K.-based firm.
Key Words: Subways, Reputation
Trust Issues: Competence, Integrity, Reputation, Loyalty

 
Fallen Financial Giants Keep Up Charitable Giving
Five years after the financial crisis, many of the players who were at its center are using significant parts of their diminished fortunes for charitable causes. And even as the debate about their actions continue, the charitable recipients say they have no qualms about accepting the contributions.  "As the leader of a nonprofit, you're typically hard-pressed for resources," said Sean Dobson, a field director for the National Committee for Responsive Philanthropy, a research and advocacy group that has researched postcrisis charitable giving. "It's pretty hard to turn down money." That is especially true since the crisis had reduced some charitable giving.
Key Word: Charity
Trust Issues: Ethics, Benevolent Concern, Motives

 
Carl Icahn: Challenging the Imperial Boardroom
What baffles me is that voting rights really don't apply to public corporations. Shareholders can vote, but boards can just ignore them under the "business judgment rule" backed by state laws and courts. How did this board-centric system ever come about? Years of lobbying by pro-management groups in state legislatures produced a thicket of laws that protect the impregnability of boards and CEOs. Shareholders have been relegated to a "take it or leave it" status.
Key Words: Activist Investing, Board of Directors
Trust Issues: Communication, Stakeholders

 
A Simple Rule, but Hard to Write – Letter to the Editor
I read with great interest the excellent story regarding the interagency rule-making process for implementing the Volcker rule ("A Simple Bank Rule Proves Difficult to Write" (page one, Sept. 11). It is indicative of the opacity of that process that much of the article is, in fact, news to me. – Daniel Gallagher, SEC Commissioner
Key Words: Regulation, Dodd-Frank Act
Trust Issue: Regulation

 
Guess Who’s Getting Some Pretty Awful Reviews: User Review Sites
The trustworthiness of Yelp, Angie’s List, and other “unbiased” ratings services is called into question in a new study by Consumer Reports. And the consumer advocacy publication is hardly the only one taking issue with user-review sites lately.
Key Word: Crowdsourcing
Trust Issues: Communication, Transparency, Reputation

 
CEO Survey is Gloomy Reading for the Corporate Sustainability Movement
The results of the world's largest CEO sustainability study make bleak reading with strong evidence that the journey towards business transformation has ground to a halt.
The survey, released to coincide with the United Nations Global Compact (UNGC) leaders summit in New York, shows that despite the recognition the world is in grave danger, business leaders do not believe the conditions are in place for them to meet the challenge.
Key Words: Sustainability, CEOs
Trust Issues: Integrity, Ethics, Stewardship

 
Mark Zuckerberg's Advice to the NSA: Communicate
Facebook tracks, intriguingly, user "trust" -- evidence of trust, apparently, as manifested through interactions. When Facebook has been criticized for privacy violations in the past, Zuckerberg said today, "what we found is that that stuff tends to not actually move the needle that much in the grand perceptions around trust." But "the NSA stuff did." 
Key Words: Transparency, NSA, Facebook
Trust Issues: Communication, Transparency, Reputation

 
Brazilian Court Allows Appeals for Political Figures Convicted of Corruption
Brazil’s highest court on Wednesday allowed a new round of appeals in a trial over a vast vote-buying scheme, a decision that may allow senior political figures in the ruling Workers Party to maneuver out of hard jail time for their actions in what may be Brazil’s biggest corruption scandal.
Key Words: Corruption, Brazil
Trust Issues: Accountability, Corruption

 
Scandals Cost JPMorgan $1 Billion in Fines
In agreements with regulators totaling $1 billion and made public on Thursday, the nation's biggest bank settled four civil investigations into its "London Whale" trading scandal and two more into the wrongful billing of credit-card customers.
Key Words: Fines, JPMorgan
Trust Issues: Responsibility, Accountability, Regulation

 
Trader’s Messages Return to Haunt ICAP in Libor Probe

Embarrassing trader chat that returns to haunt financial institutions has been a feature of the Libor scandal. Talk of bottles of Bollinger champagne in exchange for favourably altering a submission to the rate-setting process has plagued the employers of the traders in question. But for ICAP, which is expected to be the next institution to settle in the worldwide probe, a hint of its vulnerabilities is to be found in messages from traders elsewhere, namely the Royal Bank of Scotland. The interdealer broker is expected to settle within the next month by paying as much as £100m to US and UK authorities.
Key Words: Traders, Libor scandal
Trust Issues: Responsibility, Accountability, Ethics, Regulation

 
Danone Baby Food Unit 'Shocked' by China Bribery Claims
A baby food brand owned by France's Danone said it is investigating claims the company bribed hospital staff in China to use its products.
Key Words: Danone, China, Bribery
Trust Issues: Ethics, Corruption

 
Former Nokia Boss Stephen Elop to Receive $25m Pay-Off

Microsoft will fund 70% of his pay-off, which has sparked anger in Finland. The nation's economy minister, Jan Vapaavuori, reportedly said: "I find it difficult to understand the merits of this bonus." Former Nokia chief executive Stephen Elop, will receive a $25.4m (£16m) pay-off when Microsoft's deal to buy Nokia's handset business goes through.
Key Words: Nokia, CEO Pay
Trust Issues: Stakeholders, Accountability

 
Occupy Wall Street Marks Second Anniversary with Quiet Rally
Two years after getting its start in a downtown Manhattan park, Occupy Wall Street, the populist movement protesting economic inequality, marked its second anniversary on Tuesday with a protest near the New York Stock Exchange and a planned march near the United Nations.
Key Words: Occupy Wall Street, Robin Hood Tax
Trust Issues: Accountability, Communication, Stakeholders


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