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Vol
4: Issue No.8 : August, 2004 |
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| Former board members of scandal-hit companies such as Enron and WorldCom once seemed destined to become corporate pariahs, viewed as inept or worse. But for some reason, the reality has been quite different. Rather than being shunned, they have retained board memberships at other large companies and, in some cases, even added to them, according to The Corproate Library (TCL), a corporate governance analysis firm. TCL tracked more than 20 individuals who were on the boards of Enron, WorldCom, Adelphia and Global Crossing before they filled for bankruptcy protection. It found they hold over 50 board seats of US publicly traded companies. TCL said many former directors of Enron, WorldCom, Adelphia and Global Crossing are at smaller public firms, where shareholder bodies may be less activist and practices receive less scrutiny. But some sit on boards at major firms. Former Enron director Frank Savage serves on the boards of Lockheed Martin and Alliance Capital Management Holdings. Former
defense secretary William S. Cohen, who was a director of Global
Crossing, is on the boards of Viacom and AIG. Ex-Enron director
Herbert S. Winokur sits on the boards of CCC. Information Services
Group and NATCO Group, Former Global Crossing director William
E Conway is director of both Nextel Communications and United
Defense Industries. TCL said directors of companies that enter
into bankruptcy proceedings are required to disclose this fact
to any new board they join for the following five years. In some
cases, however, companies have stopped passing on the information
in proxy materials distributed to shareholders according to TCL. |
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| Co-operative
banks could soon be rated according to their performance. This
is a part of a larger move to streamline the finance sector. Efforts
are also on to come up with a plan to help states tackle their
mounting debt. The Central government favours creating a mechanism
to give credit rating to co-operative institutions, banks, departments
of various states and even state governments. “If a co-operative
institute is rated “A”, then it should directly get credit from
institutions like NABARD. According to the minister, the government
is seriously considering a move to streamline the cooperative
sector, which is currently regulated by the Reserve Bank of India
and National Bank for Agriculture & Rural development (NABARD). |
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Most companies are approached by political parties for funding support during elections, especially during general elections. As a shareholder, people need to know that some of the company’s funds may well have found their way into a political party’s coffers. Since the general elections were held in April 2004, it would be safe to assume that most donations would have been made in the year ended March 31, 2004. Grasim Industries, Hindalco, Bajaj Auto, Finolex Industries and Coromandel Fertilisers are some of the companies, which have specially disclosed the contributions they have made to political parties in 2004.
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| © 2001 Academy of Corporate Governance |
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