News Archive: 2009 (January - May)
May 5 - Shell to clash with investors on pay. The Financial Times reported that shareholders in Royal Dutch Shell, Europe’s biggest oil company, have been advised by RiskMetrics, the international voting agency, to vote against a pay plan in protest over awards made to top executives. Investor groups assert that Shell failed to meet performance objectives, yet still set major pay rises for top managers. Total pay of Peter Voser, who will take over as chief executive in July, increased by 45 per cent to €4.14m.
Trace Releases DVD on Toxic Transactions - The hour long movie features interviews with anti-bribery experts around the world. Trace says - The video features high-profile anti-bribery case studies and interviews with executives at companies such as Siemens, GE and Tyco, as well as the Department of Justice, Securities and Exchange Commission, World Bank, OECD, and UK Serious Fraud Office.
SIR – Certain assertions in your article on transparency in financial markets deserve to be reconsidered (Economics focus, February 21st). You describe transparency as amorphous, criticise it as costly and say it takes second place to trust in the money markets. It is hardly surprising that shortcomings may arise from inaccurate, immaterial and incomparable publicly available information, but transparency as a principle cannot be blamed.
A hefty prospectus veiled in legal jargon should not be considered a transparent tool of disclosure; it is a means of obfuscation. The sheer complexity of repackaging subprime loans to achieve AAA credit-ratings is indicative of efforts to deceive through disguise. Trust in financial markets vanished when the lack of transparency became apparent; it is only through transparency that investor confidence and public trust can be won back. As for “symmetry”, some investors will always be able to use information better than others, but this information should be available to all. Transparency leads to a level playing field.
The failure of the markets has resulted in massive bail-outs. By comparison, the costs of disclosure in well-regulated markets are borne by all those who promote a risk, or transfer it to others. From preventing excessive short-term risk-taking to exposing potential conflicts of interest, transparency is key to ensuring that confidence is restored.
Chair Transparency International, Berlin.