Transparency means few, if any, off-balance-sheet transactions, no minimization of risk warnings, and the board, auditors, and attorneys should have the latitude to question suspect activities.
Palo Alto, CA (PRWEB) December 16, 2011
Douglas Y. Park, principal of DYP Advisors and a Silicon Valley corporate governance attorney, was recently asked by Corporate Secretary Magazine to comment on lessons from 2011 and a governance wish list for corporate secretaries in 2012. In 2011, numerous companies made the headlines for their governance problems – Hewlett-Packard, News Corp., Yahoo!, and Nabors Corp., to name a few.
The first issue concerned lessons learned from two of the most striking examples of bad governance from 2011, Olympus and MF Global. In both cases, the board of directors did not adequately assert itself in the face of strong executives.
Mr. Park explains: “The Olympus board apparently did not adequately question the company’s off-balance-sheet transactions or carefully scrutinize the company’s deal performance. Similarly, the MF Global board appears to have been timid in critically analyzing Corzine’s strategy because of his stature.” At Olympus, the executive culture was characterized by secrecy and a demand for absolute loyalty to the company. At MF Global, CEO Jon Corzine brushed aside warnings from the firm’s risk manager.
As for how to improve governance, Mr. Park’s wish list includes a stronger culture and greater understanding of transparency. He continues: “Transparency means few, if any, off-balance-sheet transactions, no covering up or minimization of risk warnings, and a free, consistent flow of information from executives to the board, and the board, auditors, and attorneys should have the latitude to question suspect activities.”
Mr. Park has been mentioned on corporate governance matters in leading publications, including TheWallStreetJournal.com, Time.com, Agenda, a Financial Times service for corporate directors, and Reuters.
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