Friday, December 02, 2005

Lockheed Martins Independent Director?

Lockheed Martin (NYSE:LMT) elected a new independent board member. The new director James Schneider is currently CFO of Dell Inc. The press release outlines Mr. Schneider’s extensive resume. What it does not cover is what is the strategy for selecting members of the Board and why Mr. Schneider is such a good fit. The press release also indicates this was an election. Who cast ballots and what were the choices? When someone goes on the board I want to know why this individual will adequately represent shareholder interests. Having a good background in financial management is much too broad an accolade.

Thursday, December 01, 2005

Corporate Crime Increases

CFO Magazine reports as follows "So much for Sarbanes-Oxley and all of the other corporate-governance changes instituted by regulators and the stock exchanges. Nearly half of all organizations worldwide, including U.S. companies, admit they have been the victim of corporate crime in the past two years, according to PricewaterhouseCoopers's Global Economic Crime Survey 2005...."

Wednesday, November 30, 2005

Exelon/ComEd independence

Exelon Corporation independent directors also sit on ComEd’s board as independent directors. ComEd recently made a major announcement that they have an established a new independent board of directors. The Nov 28, 2005 press release also notes that four out of the five independent ComEd directors also sit on the Board of Exelon as independent directors. The press release identifies Sue Ling Gin, Edgar Jannotta, John Rogers, and Richard Thomas as independent on both boards. Exelon trades on NYSE symbol EXC. How can you be independent on both boards when one is the parent and owns its own child. Whose interests do the directors serve? How are conflicts managed? Or is this just some window dressing nonsense. I am looking for comments from ComEd, Exelon and regulators.

Caveat emptor

Tuesday, November 29, 2005

Broadcom Responds

Broadcom responded promptly to my email query about Ms. Handel’s board appointment. They insist she is independent (copy of corporate quote at bottom of this post). My points are as follow: She is AMT’s CFO. Companies of this size and caliber do not allow their CFO’s to go sit around on other boards without some understanding of potential positive benefits. AMT’s shareholders would not be well served by key C-level officers providing someone else with the best that their brain can produce. Broadcom made a big deal about Ms Handel’s expertise and knowledge of the global semiconductor industry. Which master does she serve? Broadcom and AMT are both big fish in closely aliied industries. The likelihood of not colliding in the future is far fetched. Broadcom’s corporate tagline is “Connecting Everything”. This is how I connect the dots at this time. The potential for problems exists so caveat emptor. The quote follows

“Broadcom is a fabless semiconductor company and thus has no requirement for the products and services supplied by Applied Materials. In fact Applied Materials has not been a supplier to or customer of Broadcom for at least the past three years. Ms Handel has no prior relationship with Broadcom. Consequently we consider her to be an independent director and believe her long experience in a global company closely related to our industry will prove very valuable on our Board. We look forward to her active participation.”

Monday, November 28, 2005

Weekend Follies American Thanksgiving Nov 24-27, 2005

America, the shame of it all. Thanksgiving Day Weekend and the corporate bandits continue to issue press releases when no one is looking at oddball hours during the weekend. The culprits are listed below. As I have mentioned before while there may be nothing to it, companies who do this require extra caveat emptor. Inflazyme Pharmaceuticals TSX:IZP, Monolithic Power Systems Nasdaq:MPWR, Northgate Minerals AMEX:NXG, Extendicare NYSE:EXE, Hemosol Corp Nasdaq:HMSL, Mercury Computer Nasdaq:MRCY, Amicas Nasdaq:AMCS