The hottest Corporate Governance Substack posts right now

And their main takeaways
Category
Top Business Topics

Don't give your investors common stock.

The Founder Memo • 19 implied HN points • 28 Apr 24
💼 Business Startups Investment Corporate Governance Fundraising
  1. Investors should receive preferred stock, while those who contribute time and effort get common stock. This keeps things clear and avoids complications.
  2. Issuing common stock to investors can inflate the stock price and make it harder for employees to buy in. Using preferred stock keeps the value lower for common shares.
  3. Mixing stock types complicates corporate governance, making it tougher to manage rights and responsibilities. It's best to keep it simple with preferred for money and common for effort.

#8: The World is Getting Worried + Corporate Structures + Regulatory Challenges in the US and China

Navigating AI Risks • 58 implied HN points • 19 Jul 23
🕹 Technology AI Regulation Corporate Governance US-China Relations Tech industry
  1. The UN Security Council held a session to discuss the risks and benefits of AI, highlighting concerns over international stability and nuclear control.
  2. Corporate governance is important for AI labs to prioritize safety over profit, with innovations in structures like Anthropic's Long-Term Benefit Trust.
  3. China's new AI rules balance social stability and economic development, with stringent regulations on generative AI systems.

Why CEOs are the very last job that AI will replace

The Future of Life • 19 implied HN points • 29 Feb 24
💼 Business Management Leadership Strategy Value Creation Corporate Governance
  1. CEOs are more than just financial managers; they serve as agents of the owners and have a broad range of responsibilities. Their main job is to implement the company's mission and make key value judgments that drive the business's success.
  2. AI may become very smart, but it can't replace the human ability to make complex value judgments. For example, deciding which products align with a company's values requires deep understanding and insight that AI doesn't have.
  3. Maximizing profits is not just about cutting costs; it's about pursuing a clear mission. Just like individuals find success by following their goals, businesses need a strong mission to guide their decisions.
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[PQ] TWLO: Chief Legal Officer Resigns

Nongaap Investing • 2 implied HN points • 17 Dec 24
💼 Business Corporate Governance Executive Changes Business Ethics Legal issues Stock Market
  1. The Chief Legal Officer of TWLO has resigned unexpectedly. This kind of sudden change can raise questions about the company's situation.
  2. Such resignations can signal possible issues within the company, like internal conflicts or changes in direction.
  3. It's important to pay attention to who takes over next, as this could influence TWLO's future actions and strategies.

To Be or Not To Be

Sector 6 | The Newsletter of AIM • 39 implied HN points • 04 Aug 23
🕹 Technology Semiconductors Export Controls Market Strategy Global Trade Corporate Governance
  1. AMD is facing a tough decision between following US export rules and keeping its market in China. It's a tricky balance to maintain.
  2. The US has set strict rules that prevent companies like AMD from selling advanced chips to China. These rules are aimed at restricting high-performance technology exports.
  3. Nvidia has a chip that exceeds these performance limits, illustrating the competitive tech landscape and the challenges AMD is dealing with.

Get Woke, Go Broke: Vanguard Ditches ESG Investing

Anxiety Addiction & Ascension • 39 implied HN points • 06 Mar 23
💰 Finance Corporate Governance Financial Sector Asset management
  1. Vanguard, the world's second-largest asset management firm, with $8 trillion AUM, has withdrawn from ESG, which is a significant move.
  2. There are signs of people waking up and pushing back against social engineering, like the ESG framework, showing a recalibration in public perception.
  3. Major financial institutions, like Vanguard and JPMorgan Chase, distancing themselves from ESG indicates cracks in the system and growing public awareness, potentially due to popular sentiment.

A Dream Indeed

The Radar • 39 implied HN points • 25 Apr 23
💼 Business Company Culture Corporate Governance Financial Performance
  1. Authenticity in workplace culture leads to better results and engagement. Employees feel a sense of safety, invest more time and energy, and focus on long-term goals.
  2. Honesty is essential for building trust and equality within teams. Open communication loops prevent insularity and negative outcomes, like the Enron scandal.
  3. Companies often sacrifice their values for shareholder interests. Boards prioritize shareholder value over principles, leading to short-term cost controls and reduced transparency.

The controversial ethics of Stock Buybacks [Finance Fridays]

Technology Made Simple • 39 implied HN points • 11 Feb 23
💰 Finance Stock Buybacks Investing Corporate Governance Ethics Economics
  1. Stock buybacks involve a company purchasing its own shares from the market, which can boost stock prices and reduce the number of shares in circulation.
  2. Stock buybacks are typically done by older, established companies with market dominance, in order to reward investors when they don't have resources for other investments.
  3. Controversies around stock buybacks arise from executives benefiting significantly from buybacks through stock options, while companies may conduct layoffs and seek government bailouts.

Founders, what can you learn from the OpenAI debacle?

Tech Ramblings • 19 implied HN points • 19 Nov 23
💼 Business Startups Corporate Governance Leadership Investment
  1. Make sure your board members really care about the company's success. They should have a stake in it, either by working there or owning shares.
  2. When board members leave, replace them quickly. A shrinking board can lead to risky decisions and power plays.
  3. Don’t fill your board with just 'yes men' or only investors. You need a mix of people who will challenge you and support innovation.

Illumina: Prelude to Endgame

Nongaap Investing • 60 implied HN points • 15 May 23
💼 Business Corporate Governance Legal issues Corporate strategy Whistleblowing
  1. The Illumina-Grail brouhaha could involve fraud by omitting material facts about related party transactions.
  2. Corporate governance issues, like undisclosed financial relationships between decision-makers, are a significant concern in public markets.
  3. If proven, Illumina insiders may face consequences like disgorgement of profits, potential prison risks, and challenges from regulators.

Illumina: Non-GAAP Activism

Nongaap Investing • 57 implied HN points • 29 Apr 23
💼 Business Corporate Governance Media Impact
  1. Activist investor Carl Icahn is pushing for an independent investigation into Illumina's financial dealings.
  2. In contested elections like this, the reputation of board members plays a crucial role.
  3. Shareholders are demanding greater transparency and clarity from Illumina regarding potential conflicts of interest.

SVB: Conflicts of (Insider Loan) Interest

Nongaap Investing • 37 implied HN points • 22 Mar 23
💼 Business Corporate Governance Venture Capital Conflicts of Interest Risk management
  1. Silicon Valley Bank faced a significant spike in insider loans, raising concerns about VC conflicts of interest and Director independence.
  2. Approximately 38% of SVB's reported incremental venture debt went to start-ups affiliated with Directors, prompting questions on underwriting transparency.
  3. The lack of disclosure in the Proxy Statement and the concentration of loans to insider-affiliated start-ups suggest potential VC conflicts of interest impacting risk management.

These oil shareholders are not for the turning

Fund Marketer • 3 implied HN points • 29 May 24
💼 Business Finance Investing ESG Corporate Governance Market Trends
  1. Many oil shareholders are not changing their views on climate proposals, even amidst protests. They tend to vote for management's put forth resolutions rather than the more aggressive ones suggested by other investors.
  2. The 'silent majority' of shareholders may not actively voice their opinions, but their votes can heavily influence outcomes at shareholder meetings. This often leads to management proposals winning significantly.
  3. Recent studies suggest that 'nudging' people toward certain decisions might not work as well as thought. Those nudged may not stick with their choices as much as those who decide independently.

The Case Against Corporate Stock Buybacks

Fish Food for Thought • 7 implied HN points • 09 Aug 23
💼 Business Finance Investment Corporate Governance Economics Market Analysis
  1. Companies use excess cash for stock buybacks when they lack better investment opportunities within the company.
  2. Stock-based compensation dilutes shares held by investors, impacting the company's stock value.
  3. Excessive stock buybacks show a belief that there are limited internal investment prospects, potentially thwarting company growth.

The ESG Movement: The "Goodness" Gravy Train Rolls On!

Musings on Markets • 19 implied HN points • 14 Sep 21
💼 Business Finance Corporate Governance Sustainability Investment Strategies Market Trends
  1. Measuring goodness in businesses is really hard. Different people have different views on what is 'good,' making it tough to agree on what counts.
  2. Being a good company might help some businesses make more money, but it can also hurt others. The proof that being good pays off is still unclear.
  3. Trusting companies to be good for society isn’t enough. It’s important for individuals to make their own choices and not just rely on businesses to solve social issues.

✅ Monday briefing: BBC link standards, Sky data journalism, corporate crime, brand vandals, PR capitalism, voice transcription, WaddsCon July, Socially Mobile launch, and more…

Wadds Inc. newsletter • 19 implied HN points • 12 Jul 21
💼 Business Media Marketing Corporate Governance Public Relations Social media
  1. BBC News has strict rules about linking to outside websites, ensuring links are fair and not influenced by outside pressures.
  2. Sky News is focusing more on data journalism because people's trust in news has grown during the pandemic.
  3. There are ongoing discussions about ethical practices in business, including a utility company dumping sewage to cut costs and recent controversies with brand advertisements.

Unity Bank Fraud: An Unfolding Story Of Nigerian Corporate Malfeasance

westafricaweekly • 3 implied HN points • 02 Dec 23
💼 Business Fraud Banking Regulation Corporate Governance Financial system
  1. The former chairman of Unity Bank in Nigeria orchestrated a massive financial scandal involving billions of naira in non-performing loans and a dubious loan portfolio sale.
  2. The scandal involved regulatory malpractice, compliance fraud, and the misuse of bank funds by insiders, leading to severe financial harm to the bank and potential systemic risks.
  3. Despite clear regulatory violations, the bank's management, auditors, and regulators failed to take appropriate action, highlighting a need for thorough investigations and accountability measures.

Home bias everywhere

Klement on Investing • 1 implied HN point • 18 Mar 24
💰 Finance Investing Corporate Governance
  1. Investors tend to favor domestic companies over foreign ones not only in investment portfolios but also in shareholder voting decisions.
  2. Shareholders show a bias towards voting in favor of management proposals, especially in contentious issues, with a significant preference for domestic companies.
  3. Factors like potential business ties, governance rules, and information quality contribute to this home bias in voting behavior, making it challenging to hold domestic company managers accountable.

When asset management employees spill the beans

Fund Marketer • 1 implied HN point • 21 Feb 24
💼 Business Finance Corporate Governance Employee Relations Compliance
  1. More employees in asset management are speaking up about their workplace issues. This change is happening because of struggles within the industry and the willingness to share grievances online.
  2. Companies like Jupiter and Citigroup are facing internal conflicts that are spilling into the public eye. Instead of just keeping things quiet, these issues are being reported, highlighting struggles between management and their internal teams.
  3. There may be some benefits to this openness, as leaks about misconduct could lead to improvements in industry practices. By exposing problems, employees hope to push for better working conditions and accountability.

Share Count Confusion: Dilution, Employee Options and Multiple Share Classes!

Musings on Markets • 19 implied HN points • 26 Jul 18
💰 Finance Valuation Equity Options Capital Markets Corporate Governance
  1. Young companies often face expected dilution, which means they will need to issue more shares to raise money. This can affect their value per share, as more shares mean the value is spread thinner.
  2. Stock-based compensation (SBC) can complicate valuations because it adds shares into the mix, affecting overall value. It's important to account for both past options and future grants to get a clear picture of share value.
  3. When companies have different types of shares that carry different voting rights, it can create confusion in valuations. Each share type must be valued separately to accurately determine their worth.

Stakeholder capitalism

The Jolly Contrarian • 0 implied HN points • 09 Jun 23
💼 Business Economics Management Corporate Governance Ethics Social Responsibility
  1. Shareholder capitalism emphasizes maximizing profit for shareholders as the primary goal of corporations.
  2. Stakeholder capitalism has gained popularity, shifting focus towards considering the interests of all stakeholders, not just shareholders.
  3. The conflict between shareholder and stakeholder capitalism lies in prioritizing monetary interests over ethical values, and the need for corporations to stay focused on generating profits.

Will Corporate Governance Reforms In Japan Lead to More Inward FDI?

Japan Economy Watch • 0 implied HN points • 18 Nov 21
💼 Business Corporate Governance Profitability Mergers & Acquisitions Market Trends
  1. American business leaders in Japan believe that corporate governance reforms could lead to more acquisitions of healthy Japanese businesses by foreign companies.
  2. Despite corporate governance reforms aiming for better efficiency and profitability, companies have not significantly divested or improved their core competencies.
  3. Recent data shows that despite improvements in profitability, it may be due to artificial factors rather than actual corporate efficiency gains.

Tanovo Completes Series A Financing

CyberSecurityMew • 0 implied HN points • 08 Jan 24
💼 Business Cybersecurity Investment Technology Research and Development Corporate Governance
  1. Tanovo completed Series A financing with Yida Capital and Anyuan Fund investing. The funds raised will enhance Tanovo's AI-driven cybersecurity compliance platform.
  2. Tanovo has provided cybersecurity services to thousands of government and enterprise clients in China over the past decade and has expanded its network security services across major cities nationwide.
  3. In recent years, Tanovo has focused on core areas like compliance and governance, increased investment in research and development, and diversified corporate growth into trade secrets protection and judicial appraisal.

Improving valuations through better governance

Klement on Investing • 0 implied HN points • 19 Feb 24
💼 Business Governance Valuation Liquidity Corporate Governance
  1. Improving share liquidity may not be the best way to increase company valuations. Focus on improving corporate governance instead.
  2. Increasing share liquidity by reducing the bid-ask spread can lead to a significant increase in company valuation, compared to measures like larger boards or institutional ownership.
  3. Improving corporate governance, measured by indices like ISS Board Quality scores, can have a more significant impact on increasing company valuations than just focusing on liquidity.