Amidst high-profile scandals such as Wells Fargo and Apple’s unpaid tax, there is a counter-trend of asset managers relying on environmental social governance
Corporate governance – the very name is yawn-inducing. It’s the nitty-gritty of running companies well and putting into place systems, both accounting and cultural, that help ensure long-term, trouble-free corporate success.
This year saw a number of high-profile governance failures on both sides of the Atlantic. The most recent is the Wells Fargo imbroglio, in which it was revealed that thousands of the global bank’s employees created fake accounts in order to fleece customers with fees. Employees were spurred by an internal incentive program created by management and with full knowledge of the CEO. The revelation has been a reputational disaster for Wells Fargo, and the company’s stock price has continued to decline despite the ‘retiring’ of the CEO, John Stumpf, in October.
The bank’s new CEO, Tim Sloan, has sought to reassure investors and employees on the company’s stability and prospects. However, in mid-November, the US Office of the Comptroller of the Currency, which regulates US banks, told Wells Fargo it was putting new restrictions on the company’s ability to hire top executives and issue “golden parachute’...