PRE- EMPTIVE FORENSIC CORPORATE GOVERNANCE

While corporate failures, such as Enron, WorldCom, Tyco International Ltd, Peregrine Systems, iVillage, Adelphia Communications Corp, Hollinger International , Barings Bank and the recent Societe Generale bank have focused attention on issues of accounting and financial indiscretion, there is nothing inherently new in the reasons behind these corporate collapses. Neither is there anything original in the media's hurry to name a scapegoat. For example, at “Barings Futures Singapore (BFS)'s [the] management’s structure through 1995 enabled Leeson to operate without supervision from London headquarters. Leeson was not only the floor manager for Barings' trading division on the Singapore International Monetary Exchange, he was also the head of settlement operations. Leeson was responsible for ensuring that accurate accounting information was reported to the unit. Normally the head of settlement operations and floor manager would have been held by two different employees. In other words Leeson reported to himself. This absence of checks and balances short-circuited normal accounting and auditing safeguards. After the collapse, several observers, including Leeson himself, placed much of the blame on the bank's own deficient internal auditing and risk management practices. People at the London end of Barings were all [know- it- all’s] that nobody dared ask a stupid question in case they looked silly in front of everyone else” (http://en.wikipedia.org/wiki/Barings_Bank).
SO WHO GAVE LEESON ALL THIS AUTONOMY? WAS IT NOT TOP EXECUTIVES??

If …… “Most important, the corrective actions taken to date [cannot] be sufficient to reduce the frequency and magnitude of corporate bankruptcies. …Without changes in the policy-related conditions that contribute to corporate failure, improved accounting and auditing procedures [will] accelerate bankruptcies with little effect on their frequency or magnitude. Almost all of the public and press attention, however, has focused on reducing the accounting violations, not on those policies that contribute to business failure. The major lesson from the collapse of Enron and other large corporations is that the rules of corporate governance do not adequately protect the interests of the general shareholders against the increasingly divergent interests of corporate managers (www.cato.org/pubs/handbook/hb108/hb108-22.pdf).

It is argued that a combination of legislation, regulation, effective risk management and appropriate sanctions are needed, if such unethical behaviour, and resulting corporate failure, is to be prevented in future. However, what is required is an astute, independent, assessment of these financial collapse debacles. This may establish that failures within these companies' corporate cultures and management systems allow, if not encourage, unethical behaviour by key individuals. COULD IT BE THAT THE CONTINUATION OF THE OLD BOYS CLUB may be the fundamental reason for the blatant disregard and perception of invincibility/groupthink mentality of same. COULD IT BE THAT ONCE AN EMPLOYEE IS INCREASING THE PROFITS AND BOTTOM LINE OF AN ORGANIZATION HE/SHE IS SHELTERED BY TOP EXECUTIVES, WHO MAY TURN A BLIND EYE TO UNETHICAL PRACTICES?

Dr. Rookmin Maharaj’s research on:
Corporate Governance and the Board of Directors:
Study of the Importance of the Role of the Formal & Informal Systems

Investigates corporate governance issues from a behavioural viewpoint. It makes a distinction between strict adherence to formal rules and regulations: CEO/Chair separation, independence of board members and board size and informal characteristics of board members: knowledge, values, and groupthink.
There are three main conclusions from her research and corporate experience:
1. Clearly proves that formal rules and regulations are inadequate; they have little effect upon decision making by board members. Informal characteristics must be considered in unison with the formal system when nominating board members, management and employees in order to restore shareholder confidence and to rebuild trust in corporate governance.
2. Similar values and groupthink can contribute positively to corporate decision making. However, there is a high possibility for groupthink and values to become redundant, masking board members’ and managements’ knowledge thus affecting their decision making process.
3. Skills matrices that include questions related to values, knowledge and groupthink should be considered by corporations to ensure the nomination of well-rounded members, management and employees.
Changes to board process, and board decision making, are seminal in preventing future Enron and WorldCom fiascoes. It is only by changing the behaviours of the board of directors, through adopting skills matrices, that sweeping changes can occur. In the past boards have asked: who are our board members? However, the most important question a board can ask today is: how can the skills and knowledge of our board members be used in service of the strategic direction of the corporation? This can be achieved by recruiting new board members, management and employees who fill the needs of an organization, in contrast to nominating ‘friends’ and continuing the tradition of the old boys club.

Dr. Maharaj argues that, and has tangible evidence, that what should be done is a forensic audit on 'the people that we hire' and 'employees, managers, board members' should also conduct an audit on their potential employers. What is your opinion?

Does your opinion change with this update?

According to alleged rogue trader Jerome Kerviel, " his bosses turned a blind eye to his massive, questionable trades as long as he made money for the bank"(EMMA VANDORE, http://ap.google.com/article/ALeqM5h4ncvzDOrXAnqyB9avT4zvg1iJTQD8UG7MBG0Societe Generale Board Meets).

CORPORATE GOVERNANCE, GROUPTHINK AND BULLIES IN THE BOARDROOM

EXECUTIVE SUMMARY:

This research study discusses corporate governance issues from a behavioural viewpoint. It makes a distinction between strict adherence to formal rules and regulations: CEO/Chair separation, independence of board members and board size and informal characteristics of board members: knowledge, values and groupthink.

There are three main conclusions:

1) This research clearly proves that formal rules and regulations are inadequate; they have little effect upon decision making by board members. Informal characteristics must be considered in unison with the formal system when nominating board members in order to restore shareholder confidence and to rebuild trust in board governance.
2) Similar values and groupthink can contribute positively to board members' decision making. There is, however, a high possibility for groupthink and values to become redundant, masking board members' knowledge.
3) Skills matrices that include questions related to values, knowledge and groupthink and three behavioural characteristics should be considered by boards to ensure the nomination of well-rounded members.

Changes to board process, and board decision making, are seminal in preventing future Enron and WorldCom fiascos. It is only by changing the behaviours of the board of directors, through adopting skills matrices, that sweeping changes can occur. In the past, boards have asked: who are our board members? The most important question a board can ask today, however, is: how can the skills and knowledge of our board members be used in service of the strategic direction of the corporation? This can be achieved by recruiting new board members who fill the needs of an organisation, in contrast to nominating 'friends' and continuing the tradition of the old boys club. It should be noted that out of the 100 of the largest economies in the world, 57 of these are corporations and 49 are countries. Corporations are powerful entities in our society, operating in a manner similar to representative governments. Like heads of government, at the top echelon of each corporation is the board of directors; their decisions have enormous ramifications for everyone. Although most citizens have a limited or a passive interest in corporate governance, we each depend on these corporations for jobs, salaries and as investors. Governance of these gargantuan corporations, which wield considerable economic power in the world, concerns each and every citizen. This study draws novel conclusions about the state of governance today, and presents practical solutions for corporations to consider when selecting board members. The detailed discussion about what happens in the boardroom demystifies board process and provides the bases for three critical objectives when selecting new board members or evaluating current board members performance:

1) ascertain and embellish the knowledge base of directors;
2) motivate directors to share and gather information to ensure personal values are congruent with organisational values; and
3) ensure clear and fluent transmission channels exist to reduce the potential of having groupthink on board.

view Dr.Rookmin Maharaj's full journal article at:

http://www.palgrave-journals.com/jdg/journal/vaop/ncurrent/abs/2050074a.html

SUSTAINABILITY REPORTING IN THE UPSTREAM PETROLEUM INDUSTRY IN CANADA

OBJECTIVES :

There are four different reporting guidelines that could be used by Canadian upstream petroleum companies in the preparation of sustainability reports. These four guidelines are:

• Enhanced Business Reporting Framework (EBR);
• Global Reporting Initiative Guidelines (GRI);
• Sustainability Reporting Guidelines by International Petroleum Industry Environmental Conservation Association (IPIECA) and American Petroleum Institute (API); and
• Stewardship Benchmarking Guide produced by the Canadian Association of Petroleum Producers (CAPP).
The current research compares these guidelines and attempts to determine what obstacles they present, if any, for both preparers and users of sustainability reports. We present recommendations for streamlining the reporting process and making it easier to access sustainability information for use in decision making.

Please visit the published report at:

http://www.iseee.ca/iseee/files/iseee/ABEnergyFutures-09.pdf

VILLAGE SWARAJ AND SUSTAINABLE DEVELOPMENT

Mahatma Gandhi.s Ideas as Seen through the Eyes of Pandit Jawaharlal Nehru Today

Please visit Dr. Rookmin Maharaj's article at:
http://www.advaitaashrama.org/pb_archive/2006/PB_2006_September.pdf

PERSPECTIVES ON TEACHING AND TEACHER ISSUES

Teaching is a profession which is so enormous and so packed with significance that the issues related to it have a consistently high ranking with members of society in virtually every public opinion poll. These issues include multicultural education, teacher training and accreditation, burn-out, teaching under conditions particular to a worldwide certain country, student behavior and preparation, computers in the classroom, parental influence on the teaching process, the changing curriculum and its meaning for teaching, budgetary problems, and a multitude of similar issues. This new book presents issues current to the field from educators and researchers from around the globe.

Table of Contents:
Chapter 4.- Developing Critical Thinking Skills through the use of Computer-Mediated Conferencing; pp. 79-99