A shareholder in SandRidge Energy, Inc. (SD) said the Oklahoma oil and natural gas company should find new management, making complaints about various issues including “appalling” corporate governance. We have warned for more than a year about SandRidge’s high risk in this area, and its financial statements continue to reflect problematic accounting and board composition, [...]
Tag Archives | esg
GMI Ratings Governance Issue | SandRidge Energy, Inc.
November 12, 2012 in Corporate Governance, Daily Viewpoint, Flash Reports
GMI Ratings Governance Issue | The Goldman Sachs Group, Inc.
November 7, 2012 in Corporate Governance, Daily Viewpoint, Flash Reports
The Goldman Sachs Group, Inc. (GS) announced the appointment of another independent director, Mark Edward Tucker, effective Nov. 5. But Goldman has much further to go on improving its corporate governance. Mr. Tucker isn’t the ideal candidate. As the CEO of AIA Group Ltd., the insurance company that American International Group Inc. (AIG) spun-off in [...]
GMI Ratings Governance Update | Chesapeake Energy Corp.
November 6, 2012 in Corporate Governance, Daily Viewpoint, Flash Reports
Chesapeake Energy Corp. (CHK) downwardly revised its earlier estimates about the value of its natural gas and oil properties by more than $2 billion in the three months ended September 30. The U.S. energy company’s high risk of delivering such surprises has been manifest for years and continues. Chesapeake explained its need to adjust estimates [...]
GMI Ratings Governance Update | MetLife, Inc.
November 5, 2012 in Corporate Governance, Daily Viewpoint, Flash Reports
MetLife, Inc. (MET) said it swung to a loss during the three months ended September 30, in part because the New York insurer had to downwardly revise its earlier estimates about the value of its U.S. retail annuity business by around $1.6 billion. The company is prone to such surprises. As we noted in August, [...]
GMI Ratings Governance Issue | Allstate Corp.
October 31, 2012 in Corporate Governance, Daily Viewpoint, Flash Reports
As homeowners grapple with damages in the aftermath of the storm in the Northeastern U.S. this week, The Allstate Corp. has readied its staff to handle the inevitable insurance claims. Unfortunately, those seeking help depend on the promises made by a company that shows signs of poor corporate governance. Allstate said Monday that it had [...]
GMI Ratings Governance Update | CNOOC Ltd.
October 30, 2012 in Corporate Governance, Daily Viewpoint, Flash Reports
Regulators are considering whether to approve China-based CNOOC Ltd.(CEO)’s $15.1 billion bid for Canada-based Nexen Inc (NXY). While neither energy company has stellar corporate governance, CNOOC Ltd.’s leaves more room for improvement. Canadian Prime Minister Stephen Harper said CNOOC Ltd.’s offer “raises a range of difficult policy questions,” Bloomberg reported this month. They will be [...]
Occam’s Razor, ESG, and Leading Indicators
October 29, 2012 in Corporate Governance, Daily Viewpoint, ESG Ratings & Research
By Kimberly Gladman, CFA, Ph.D., Director of Research This year’s winner of the Moskowitz prize, the prestigious award for research in responsible investment, is a study of the relationship between shareholder engagement on environmental, social and governance (ESG) factors and stock returns. Using data from a large active investor, the study found that US public [...]
GMI Ratings Governance Update | TransDigm Group Inc.
October 29, 2012 in Corporate Governance, Daily Viewpoint, Flash Reports
TransDigm Group Inc. (TDG) recently announced reforms such as no longer entitling senior executives to company-paid automobile or country club expenses — but clearly, the aircrafts parts supplier has a much longer way to go on improving its corporate governance. The company said October 25 that the previous day it amended its employment agreements with executives ranging from [...]
Checking Up on Chipotle Mexican Grill
October 26, 2012 in Corporate Governance, Daily Viewpoint, Ratings Watch
By Damion Rallis, Senior Research Associate Shares of Chipotle Mexican Grill (NYSE:CMG) tumbled dramatically since our last Ratings Watch piece in which we argued that the high-end burrito peddler was “Too Spicy for Investors” have. When our original report was released on September 21, the company’s share price opened at $342.37, but as of a [...]
Responsible Investment in Europe: Let’s Hear it for Philosopher Kings
October 23, 2012 in Corporate Governance, Daily Viewpoint, Investment Returns
By Kimberly Gladman, CFA, Ph.D., Director of Research This year’s European SRI Study estimates that €6.8 trillion in European AUM (as of 2011) are being invested using at least one responsible investment strategy. This is an increase of over 35% since the last estimate of €5 trillion, made in 2009. While it’s not clear if [...]
GMI Ratings Update | OAO Rosneft
October 23, 2012 in Corporate Governance, Daily Viewpoint, Flash Reports, Small Print
The U.K. oil giant BP p.l.c. (BP) said that it agreed to sell its stake in TNK-BP to OAO Rosneft (ROSN). As part of the deal, BP expects to have two seats on Rosneft’s board, in a development that could slightly strengthen the Russian government-owned oil company’s corporate governance without actually curing its continuing problems. [...]
GMI Ratings Governance Update | Wal-Mart Stores, Inc.
October 19, 2012 in Corporate Governance, Daily Viewpoint, Flash Reports
News hit recently about an allegation that Wal-Mart Stores, Inc. (WMT) invested illegally in India. While such issues have not prevented the retailer’s stock from gaining so far this year, the retailer’s managers do use short-term thinking in their approach to boosting profit. The New York Times reported last spring that Wal-Mart’s Mexican unit paid [...]
Alpha Natural Resources, Inc. Poses Imminent Danger to Shareholders
October 17, 2012 in Corporate Governance, Daily Viewpoint, Ratings Watch
By Greg Ruel, Senior Research Associate Recent cash tender offer results at coal supplier Alpha Natural Resources, Inc. (ANR) sparked the attention of GMI Ratings. On September 27, the company issued new debt, offering up $500 million in senior notes backed by Alpha subsidiaries and priced at an interest rate of 9.75%. The interest rate [...]
GMI Ratings Governance Issue | Porsche Automobil Holding SE
October 16, 2012 in Corporate Governance, Daily Viewpoint, Flash Reports
Porsche Automobil Holding SE (PAH3.DE) reportedly won a recent victory in its ongoing battles over allegations that it manipulated the market. Even if the courts ultimately decide that the German car maker is innocent, Porsche could do more to bulletproof itself from criticism by improving its corporate governance. German and U.S. investors claim that Porsche’s [...]
The Latest on Private Equity and ESG
October 9, 2012 in Daily Viewpoint, ESG Ratings & Research
By Kimberly Gladman, CFA, Ph.D., Director of Research Last week was a great one for learning about ESG developments in the private equity space. At the PRI conference in Toronto, two noteworthy papers dealt with the topic in a French context. The first, entitled “The Price of Sustainability: An Experiment with Professional Private Equity Investors” [...]
GMI Ratings Governance Issue | Chaoda Modern Agriculture
October 4, 2012 in Corporate Governance, Daily Viewpoint, Flash Reports
Chaoda Modern Agriculture on the verge of delisting By Richard Yim, Research Analyst Chaoda Modern Agriculture announced on September 28 that its five-month long search for an auditor continues. BDO Limited resigned as outside auditor on April 26, 2012 and in its letter of resignation said that it was unable to complete the audit for [...]
GMI Ratings Governance Issue | Tenet Healthcare Corp.
October 3, 2012 in Corporate Governance, Daily Viewpoint, Flash Reports
Tenet Healthcare Corp.’s (THC) accounting of its finances has grown less conservative in recent months. Now, as the health care services company’s cash dwindles, CEO Trevor Fetter is taking on even more risk with a plan to raise debt, buy back shares and make acquisitions. Tenet said on October 1 that it is raising $800 [...]
GMI Ratings Governance Update | News Corp.
October 1, 2012 in Corporate Governance, Daily Viewpoint, Flash Reports
News Corp. (NWS) will announce five appointments including former regulators to lead its new compliance units, the Financial Times reported late Sunday. But at the same time, the media conglomerate’s financial statements have shown increased signs of problematic accounting in recent months as it undergoes various forms of upheaval. News Corp.’s new chief compliance officer Gerson Zweifach will announce [...]
GMI Ratings Governance Issue | Olympus Corp.
September 28, 2012 in Corporate Governance, Daily Viewpoint, Flash Reports
Olympus Corp. (OCPNY) and three of its former executives pleaded guilty this week to charges related to a $1.7 billion accounting cover-up, the media reported. During the year since the Japanese equipment maker’s former CEO Michael C. Woodford raised questions about its deal-making, Olympus has made some improvements to its corporate governance, but continues to [...]
GMI Ratings Governance Issue | Discover Financial Services
September 27, 2012 in Corporate Governance, Daily Viewpoint, Flash Reports
Regulators ordered Discover Bank to refund around $200 million to consumers after alleging that the unit of Discover Financial Services (DFS) marketed deceptively. Despite this recent embarrassment, the banking and payment services firm’s financial statements continue to show signs that the managers care more about appearances than reality. The Federal Deposit Insurance Corporation (FDIC) and [...]