Though Biovail reports increased profits for 2008, former CEO Eugene Melnyk (who maintains 11% ownership of the company) is still calling for a shareholder vote on “several resolutions to bolster Biovail’s corporate governance practices”. Melnyk’s attempt to overthrow the Biovail board failed in 2008, and he is still faces Ontario Security Commission proceedings for activities during his tenure as Biovail CEO. HudBay Minerals currently facing takeover attempt.
Corporate Goverance Lessons from MPL Communications Inc.— court decision comes down citing that “the affairs of the company have been run in a way that is either prejudical to, or disregards, the interests of the minority shareholders”. Notable were excessive fees paid to a private company owned by two senior managers, interest-free loans to said company, and dubious claims of Director independence. “Two Ways to Fix Corporate Boards” includes board self-improvement at best, and proxy access if all else fails.
On how the US federal government’s increased stake in Citigroup may be undermining shareholders and corporate governance principles. At the same time, global investors call on President Obama to instate UK (and Canadian) style “comply or explain” corporate governance model. And on the role of business ethics courses in response to economic meltdown. UK Investment Fund F&C blames corporate governance failures for current financial crisis: “We believe that a failure in governance lies at the heart of the banking crisis. The events of the last few months have confirmed that the soaring pay packages for top bank executives were driven by extraordinary risk-taking rather than real, sustainable profits. Investors can be part of the solution, by spotting red flags and using their influence as shareholders to press for better governance practices.”
Nell Minow on “outrageous” CEO pay, and who is to blame: “I will tell you that the biggest disappointment I’ve had in this mess has been the absolute vacuum of leadership on the part of the business community… And we have completely failed to address the demand side of corporate governance, which is what shareholders must do. Shareholders have reelected these directors, have approved these pay plans, and have been enablers for the addictive behavior of the corporate community.”