||Issue No. 145||19 July 2002|
Two Wings Flapping
Interview: In The Tent
Bad Boss: The Desk Nazi
Media: Hold the Presses
Workplace: Putting Bullies In Their Place
Industrial: Women and Work
International: Whine and Dine
History: Black Adder
Review: Bad Movie
Poetry: I Remember
The Locker Room
Week in Review
Hooray for Frank!
Reform or Die
Week in Review
A Share of the Action
Well, blow me down, and tickle me with a feather duster ... "executive remuneration linked to share prices can lead to an unhealthy preoccupation with supporting a company's share price and too heavy a focus on short-term performance." This might be as obvious as the nose on a seasoned wino's face to the average Joe but, coming from the boss of the Australian Secutiries and Investments Commission, it is being treated as a flash on blinding insight. Mr Knott is one of a number of business "players" addressing himself to the issue of corporate governance.
While big business continues its whinge about the prospect of the ACCC having some powers, the Australian Consumers Association says they should be strengthened. It fingers the Commonwealth Bank, GE Capital Finance, Colonial State Bank, St George Bank, Primus, Orange, Microsoft and Gator.com for forcing consumers into unfair contractual arrangements. It points out that Colonial State Bank consumers can be deemed in default of their home loans if they are late paying off a credit card bill.
Two out of three insurance companies within the doomed HIH Group were insolvent fully two years before the whole outfit went tits-up, leaving$5.3 billion in bad debts, according to evidence at the HIH Royal Commission.
On the subject of Commissions Royal, we wonder what Old King Cole makes of a Master Builders Association plan to lower insurance costs and give consumers increased protection. Cole has set himself up as something of a champion of the under-capitalised, marginal industry player, railing against CFMEU efforts to ensure compliance with tax, workers comp, safety and a host of other liabilities. The Master Builders Association is negotiating with insurers to create a non-protit corporation offering discounted insurance to builders, subcontractors and developers with "exemplary" records. Under the proposals, members would have their work inspected and they would be required to undertake education on codes, practises and occupational health and safety. In short, to make the thing work it seems it will not be open to the chancers, phoenixers and tax rorters relied on so heavily by counsels assiting the Cole Commission. A suspicious mind, with a limited grasp on industry reality, might even see it as compulsory unionism by the back door.
Here's another humdinger by way of homily. Get this - corporations focus too much on their bottom lines and need to pay more attention to community and enironmental concerns. Says who? Well, Leon Davis actually and he is the chairman of Westpac. Yes, you're right, Westpac is a bank and a bloody big one at that.
They're beating their breasts and wringing their hands about corporate governance over in the US as well. Amazing what a bit of a glitch on the old stockmarket will induce in champions of deregulation. Trouble with old George is that nobody takes him seriously which, given that he is a wholly owned subsidiary of US Inc, is probably not all that surprising. Now those pesky journos are raking over the whole Harken business again. Bush was a director of Harken, a member of its audit committee in fact, when he decided to sell his entire holding for $US800,000 ($4 a share), barely two months before the price went into free fall. Those shares now trade for 40 cents a piece but the Securities and Exchange Committee absolved Bush because the price went up for one day, after he sold.
Corporate scandals move one block closer to the White House with news that vice president Dick Cheney had been party to allegedly illegal accounting practises by his oil company. Cheney stays mum about corporate wongdoing, refusing to answer all inquiries about his tenure as CEO at the oil services giant, Halliburton, a position he held until 2000. But Devid Lesar, Cheney's successor, informs Newsweek magazine that the VP had been "fully aware" of accounting formula that counted projected revenue as earned profits, obscuring the true picture of company finances from shareholders.
Analysts Merrill Lynch reveal that if US corporations were compelled to tell the truth by including stock options as costs, many would suffer massive hits to their bottom lines. Such a bookkeeping change would reduce reported earning across the country by billions of dollars with more than 100 companies suffering declines of more than 20 percent in their reported earnings. Internet seach engine, Yahoo, for example would have seen its earnings per share turned from plus 10 cents a share to a loss of $1.47. According to Merrill Lynch, 42 percent would have been carved off Dell's earnings, 35 percent from AOL Time Warner and 22 percent from Microsoft.
Still, reassuringly, Cheney and Bush have a cunning plan. They want to recruit more than four percent of their country men and women as citizen spies. The extraordinary plan, known as TIPS, or the Terrorism Information and Prevention System, would leave the US with a higher percentage of citizen informants than the former East Germany when the Stasi was at the peak of its powers.
TIPS informants are being primarily recruited from those whose work gives them access to homes, businesses or transport systems. Posties, utility employees, truck drivers and train conductors are amongst those being targeted. Civil liberties groups warn that, in conjunction with the Patriot Act passed earlier this year, there is potential for abusive, large-scale, secret investigations of US citizens.
Federal Reserve boss Alan Greenspan catches onto the reality of unregulated capitalism, albeit a bit late in life, informing a Senate committee that "infectious greed" has gripped the nation's business community. Dr Greenspan professes to being "deeply distressed" to learn accountants are ratifying dodgy figures because he always banked on their integrity. "I was wrong," he confesses. "The incentives overcame the good judgement of too many corporate managers. It is not that humans have become any more greedy than in generations past. It is that the avenues to express greed had grown so enormously."
Meanwhile, back in Australia, the champions of economic deregulation in the Howard Government, refuse to back down on internationally-challenged regulations that see asylum seekers thrown into detention centres. After 12 and 13-year-old Woomera escapees take refuge in the British Consulate in Melbourne, it emerges that while they were holed up in the South Australian desert with their mother and siblings, their father was living in Sydney under a temporary protection visa
Finally, building industry unions are understood to be taking lessons in direct action from Nigerian village women holding 700 Chevron Texaco employees hostage at the giant Escravos oil terminal. The 600 women, aged 30 to 90, are threatening to strip naked if the American multi-national does not hire local labour and devote some of its profits to developing their run down communities. "Our weapon is our nakedness," says Helen Odeworitse, a representative of the women in the seven-day-old protest. Some Nigerian tribes consider displays of deliberate nudity by wives, mothers or grandmothers an act that shames those at which it is aimed. No comment has been received from the mainly American, British, Canadian and Nigerian oil workers on the protest front line. Labor Council secretary John Robertson says building industry workers are watching Nigerian developments with "mounting interest".
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