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	<title>IGOPPGouvernance créatrice de valeurs &#8211; IGOPP</title>
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		<title>Damages of the short-term mindset</title>
		<link>https://igopp.org/en/damages-of-the-short-term-mindset/</link>
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		<pubDate>Tue, 06 Aug 2019 19:24:00 +0000</pubDate>
		<dc:creator><![CDATA[IGOPP Site web]]></dc:creator>
				<category><![CDATA[IGOPP in the Medias]]></category>
		<category><![CDATA[IGOPP in the medias]]></category>
		<category><![CDATA[Executive compensation]]></category>
		<category><![CDATA[Gouvernance créatrice de valeurs]]></category>
		<category><![CDATA[Hostile takeovers]]></category>
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		<guid isPermaLink="false">https://igopp.org/damages-of-the-short-term-mindset/</guid>
		<description><![CDATA[In March 2014, CEOs of many Fortune 500 corporations received a letter that started with these words: “We are preoccupied&#8230; that too many companies have cut capital expenditure and even increased debt to boost dividends and increase share buybacks. We certainly believe that returning cash to shareholders should be part of a balanced capital strategy; however, when [&#8230;]]]></description>
		<content><![CDATA[In March 2014, CEOs of many Fortune 500 corporations received a letter that started with these words:

“We are preoccupied... that too many companies have cut capital expenditure and even increased debt to boost dividends and increase share buybacks. We certainly believe that returning cash to shareholders should be part of a balanced capital strategy; however, when done for the wrong reasons and at the expense of capital investment, it can jeopardize a company’s ability to generate sustainable long-term returns.

This was not written by a socialist economist, but by Larry Fink [1], president and CEO of BlackRock, arguably the largest investment firm in the world.

Fink is a powerful voice in the ongoing concern with the “tyranny of the short-term mindset” that, according to many commentators, plagues both Wall Street and Main Street. Another was Vanguard founder John Bogle, who said that “we have ceased to be investors and have become speculators”, and even devoted his last book to the subject (The Clash of the Cultures: Investment vs. Speculation, John Wiley &#38; Sons, 2012).

Yvan Allaire, president of the Institute for Governance of Private and Public Organizations, in Montreal, defines "short-termism" as “the conscious decision on the part of management to take measures that will have a positive effect on share price in a near future, even while knowing very well that such measures can eventually harm the long-term well-being of the corporation.”

In financial markets, the most visible form of short-termism hinges on the average time investors hold on to shares, which has shrunk from 97 months, in 1950, to 7 months in 2010. However, that shortened holding period can be overly influenced by computer trading volumes, acknowledges Allaire.

[ ... ]

“Corporations should get their capital from an IPO and then concentrate on their core business of product, market and human resources development,” says Samuelson adding that linking executive pay to the stock price causes the separation line between two very distinct markets to blur. ”Another unfortunate outcome of linking pay structure to shares is that “it tempts CEOs to sell their company, and profit from it,” Allaire notes.

Apart from severing links between executive pay and share price evolution, Samuelson and Allaire put forward two measures that could help correct short-termism. a) Before having the right to vote, an investor should hold on to his shares for at least one year. The present state of things is the equivalent of allowing tourists and temporary visitors to vote for a country’s government, highlights Allaire. b) The longer an investor holds onto his shares, the lower should the capital gains tax be.

Read more [2]

[1] https://www.reuters.com/article/us-blackrock-dividends/blackrock-ceo-to-us-companies-dont-overdo-divs-buybacks-idUSBREA2P1C820140326
[2] https://igopp.org/wp-content/uploads/2019/08/YBarcelo_Damages-of-the-short-term-mindset_Morningstar_August-2019.pdf]]></content>
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		<item>
		<title>Theory, Evidence, and Policy on Dual-Class Shares: A Country- Specific Response to a Global Debate</title>
		<link>https://igopp.org/en/theory-evidence-and-policy-on-dual-class-shares-a-country-specific-response-to-a-global-debate/</link>
		<comments>https://igopp.org/en/theory-evidence-and-policy-on-dual-class-shares-a-country-specific-response-to-a-global-debate/#respond</comments>
		<pubDate>Tue, 18 Jun 2019 18:56:05 +0000</pubDate>
		<dc:creator><![CDATA[IGOPP Site web]]></dc:creator>
				<category><![CDATA[IGOPP in the Medias]]></category>
		<category><![CDATA[IGOPP in the medias]]></category>
		<category><![CDATA[Actions multivotantes]]></category>
		<category><![CDATA[Dual-class shares]]></category>
		<category><![CDATA[Gouvernance créatrice de valeurs]]></category>
		<category><![CDATA[Value-creating governance]]></category>

		<guid isPermaLink="false">https://igopp.org/theory-evidence-and-policy-on-dual-class-shares-a-country-specific-response-to-a-global-debate/</guid>
		<description><![CDATA[Dual-class shares have become one of the most controversial issues in today´s capital markets and corporate governance debates around the world. Namely, it is not clear whether companies should be allowed to go public with dual-class shares and, if so, which restrictions (if any) should be imposed. Three primary regulatory models have been adopted to [&#8230;]]]></description>
		<content><![CDATA[Dual-class shares have become one of the most controversial issues in today´s capital markets and corporate governance debates around the world. Namely, it is not clear whether companies should be allowed to go public with dual-class shares and, if so, which restrictions (if any) should be imposed.

Three primary regulatory models have been adopted to deal with dual-class shares:

 	(i) prohibitions, existing in countries like the United Kingdom, Germany, Spain, Colombia, or Argentina;
 	(ii) the permissive model adopted in several jurisdictions, including Canada, Sweden, the Netherlands, and particularly the United States; and
 	(iii) the restrictive approach recently implemented in Hong Kong and Singapore.

This paper argues that, despite the global nature of this debate, regulators should be careful when analysing foreign studies and
approaches, since the optimal regulatory model to deal with dual-class shares will depend on a variety of local factors. It will be argued that, in countries with sophisticated markets and regulators, strong legal protection to minority investors, and low private benefits of control, regulators should allow companies going public with dual-class shares with no restrictions or minor regulatory intervention (e.g., eventbased sunset clauses).

[ ... ]

65 Yvan Allaire, Enough with the Shibboleth on Dual Class of Shares, Le MÉDAC (2016), pp 3 (available at
https://medac.qc.ca/documentspdf/articles/2016-05_yvan_allaire_vote_multiple_anglais.pdf) [1].

&#160;

To read the complete study, please click here [2].

[1] https://medac.qc.ca/documentspdf/articles/2016-05_yvan_allaire_vote_multiple_anglais.pdf)
[2] https://igopp.org/wp-content/uploads/2019/06/Gurrea-Martinez-2019.pdf]]></content>
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		<item>
		<title>Short-term thinking forcing companies to delay IPOs, opt for dual-class shares: Governance expert</title>
		<link>https://igopp.org/en/short-term-thinking-forcing-companies-to-delay-ipos-opt-for-dual-class-shares-governance-expert/</link>
		<comments>https://igopp.org/en/short-term-thinking-forcing-companies-to-delay-ipos-opt-for-dual-class-shares-governance-expert/#respond</comments>
		<pubDate>Tue, 14 May 2019 14:03:06 +0000</pubDate>
		<dc:creator><![CDATA[IGOPP Site web]]></dc:creator>
				<category><![CDATA[IGOPP in the Medias]]></category>
		<category><![CDATA[IGOPP in the medias]]></category>
		<category><![CDATA[Activism]]></category>
		<category><![CDATA[Chief Executive Officer]]></category>
		<category><![CDATA[Dual-class shares]]></category>
		<category><![CDATA[Gouvernance créatrice de valeurs]]></category>
		<category><![CDATA[Head offices]]></category>
		<category><![CDATA[Hedge funds]]></category>
		<category><![CDATA[Value-creating governance]]></category>

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		<description><![CDATA[Yvan Allaire, executive chair at the Institute for Governance of Private and Public Organizations, joins BNN Bloomberg to discuss &#8220;quarterly capitalism&#8221; in light of WestJet CEO Ed Sims’ warning on the destruction it brings to long-term company plans. To watch this interview, please click here. &#160;]]></description>
		<content><![CDATA[Yvan Allaire, executive chair at the Institute for Governance of Private and Public Organizations, joins BNN Bloomberg to discuss "quarterly capitalism" in light of WestJet CEO Ed Sims’ warning on the destruction it brings to long-term company plans.

To watch this interview, please click here. [1]

&#160;

 [2]

[1] https://www.bnnbloomberg.ca/video/short-term-thinking-forcing-companies-to-delay-ipos-opt-for-dual-class-shares-governance-expert~1683258
[2] https://www.bnnbloomberg.ca/video/short-term-thinking-forcing-companies-to-delay-ipos-opt-for-dual-class-shares-governance-expert~1683258]]></content>
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		</item>
		<item>
		<title>On becoming an «activist board»&#8230; In the age of activist shareholders</title>
		<link>https://igopp.org/en/on-becoming-an-activist-board-in-the-age-of-activist-shareholders/</link>
		<comments>https://igopp.org/en/on-becoming-an-activist-board-in-the-age-of-activist-shareholders/#respond</comments>
		<pubDate>Mon, 12 Jun 2017 19:57:55 +0000</pubDate>
		<dc:creator><![CDATA[IGOPP Site web]]></dc:creator>
				<category><![CDATA[Books]]></category>
		<category><![CDATA[Actionnaires]]></category>
		<category><![CDATA[Activism]]></category>
		<category><![CDATA[Activisme]]></category>
		<category><![CDATA[Gouvernance créatrice de valeurs]]></category>
		<category><![CDATA[Hedge funds]]></category>
		<category><![CDATA[Parties prenantes]]></category>
		<category><![CDATA[Shareholders]]></category>
		<category><![CDATA[Stakeholders]]></category>
		<category><![CDATA[Value-creating governance]]></category>

		<guid isPermaLink="false">https://igopp.org/on-becoming-an-activist-board-in-the-age-of-activist-shareholders/</guid>
		<description><![CDATA[After some 15 years of tweaking and polishing the theory and practice of “good” governance, perfectly independent board members remain surprise-prone, estranged from the goings-on in the company, partially informed and lacking the wherewithal to challenge management. No doubt that the legitimacy and credibility of boards have suffered as a result. In the current age, [&#8230;]]]></description>
		<content><![CDATA[After some 15 years of tweaking and polishing the theory and practice of “good” governance, perfectly independent board members remain surprise-prone, estranged from the goings-on in the company, partially informed and lacking the wherewithal to challenge management. No doubt that the legitimacy and credibility of boards have suffered as a result.

In the current age, institutional shareholders have all become “activist” investors. Some funds make it their mission to push aggressively on boards of directors to implement measures that they (the activists) deem likely to boost stock prices. Other funds may be less vocal and less aggressive but will support the “activist” funds as well as put forth their own expectations in private meetings with management and the boards.

Boards will have to raise their game, move to a value-creating sort of governance. Corporate boards of the future will have to also become “activists” in their quest for information, their willingness to stand up to short-term pressures and their ability to question management’s strategies, compensation and performances.

This book proposes a “revolutionary” form of governance building on some of the steps taken by the more thoughtful boards: more involvement in strategy making, creation of ad hoc committees, more substantive training for board members and their extensive exposure to all facets of the business, independently sourced information transmitted to board members, etc. But that does not suffice, as this book demonstrates.

Getting to a more effective form of governance will call upon unusual, even controversial, measures by boards. It will also require institutional investors to change a number of their policies and practices and for governments to level the playing field.

This book makes, we believe, a forceful case for a different kind of governance system capable of delivering long-term value to all stakeholders and to society at large.
]]></content>
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		<item>
		<title>Are our State-owned enterprises well governed?</title>
		<link>https://igopp.org/en/are-our-state-owned-enterprises-well-governed/</link>
		<comments>https://igopp.org/en/are-our-state-owned-enterprises-well-governed/#respond</comments>
		<pubDate>Thu, 08 Jun 2017 17:00:09 +0000</pubDate>
		<dc:creator><![CDATA[IGOPP Site web]]></dc:creator>
				<category><![CDATA[News and Media]]></category>
		<category><![CDATA[Press Releases]]></category>
		<category><![CDATA[Chairman of the Board]]></category>
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		<guid isPermaLink="false">https://igopp.org/?p=8166/</guid>
		<description><![CDATA[Montreal, June 8, 2017 – The Institute for Governance (IGOPP) is unveiling today the results of a study about the quality of governance at 46 Quebec State-owned enterprises, which collectively have revenues of $63 billion, employ some 65,000 people, receive more than $4 billion in subsidies and generate more than $4 billion in dividends for the [&#8230;]]]></description>
		<content><![CDATA[Montreal, June 8, 2017 – The Institute for Governance (IGOPP) is unveiling today the results of a study about the quality of governance at 46 Quebec State-owned enterprises, which collectively have revenues of $63 billion, employ some 65,000 people, receive more than $4 billion in subsidies and generate more than $4 billion in dividends for the government.

Given their economic and fiscal role, it is important to assess the overall governance of these organizations, the make-up of their boards, their transparency, their adherence to best practices.

The governance score given to each State-owned enterprise is based on 47 variables selected to assess four different aspects of governance: (1) Board composition and structure (26% of total score); (2) Dynamic of board meetings (14%); (3) Qualifications of board members and their appointment/selection process (31%); and (4) Transparency, disclosure and accountability (29%).

These are summary findings:

 	Quebec State-owned enterprises achieved grades for governance ranging from 25% to 87%;
 	A significant difference is noted between those organizations which are subjected to the Quebec law on governance of State-owned enterprises enacted in 2006 versus those which are not;
 	Only half of the 46 State-owned enterprises in this study achieved a passing grade (60% and up).

These results lead to specific recommendations addressed in part to the Quebec government and in part to the boards of directors of State-owned enterprises.

The Quebec government should review and amend the outdated statutes governing several corporations so that all are required to implement best governance practices.

All boards of directors should adopt high-level governance principles and processes, even if not called for by their legal statute, provided that they do not thereby infringe the statute's requirements.

All boards should review their governance score and take measures to swiftly improve their score.

It is noteworthy that, with few exceptions, State-owned enterprises do not divulge the profile of expertise and experience they have set for their board, do not, in many cases, provide complete biographies of their board members, and rarely make public the relationship between the profile of expertise set for the board and the individual biographies of board members. Such disclosure has now become inescapable for any corporation listed on an exchange.

Finally, the information on the compensation of executive officers is often incomplete and, too often, their websites are not user-friendly making it difficult to access information on their governance, their financial results, their strategic plan and whatever performance indicators they use to monitor management.

For any information or to request an interview: 

Majida Lamnini
 Director, Strategic Initiatives, IGOPP &#124; 514.439.9301 &#124; mlamnini@igopp.org [1] &#124;www.igopp.org

[1] https://igopp.orgmailto:mlamnini@igopp.org]]></content>
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		<item>
		<title>Capturing long-term investors the Toyota way</title>
		<link>https://igopp.org/en/capter-des-investisseurs-a-long-terme-a-la-facon-de-toyota/</link>
		<comments>https://igopp.org/en/capter-des-investisseurs-a-long-terme-a-la-facon-de-toyota/#respond</comments>
		<pubDate>Wed, 01 Jul 2015 20:37:22 +0000</pubDate>
		<dc:creator><![CDATA[mlamnini]]></dc:creator>
				<category><![CDATA[News Articles]]></category>
		<category><![CDATA[Actionnaires]]></category>
		<category><![CDATA[Actions multivotantes]]></category>
		<category><![CDATA[Dual-class shares]]></category>
		<category><![CDATA[Entreprises privées]]></category>
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		<guid isPermaLink="false">https://igopp.org/capter-des-investisseurs-a-long-terme-a-la-facon-de-toyota/</guid>
		<description><![CDATA[In the on-going quest for innovative capital structures, Toyota has recently provided an interesting twist and tied in knots a number of institutional investors. Toyota believes that developing the next generation technologies will require massive investments over many years. It also believes that the current state of investment practices, the prevalence of roaming funds and [&#8230;]]]></description>
		<content><![CDATA[In the on-going quest for innovative capital structures, Toyota has recently provided an interesting twist and tied in knots a number of institutional investors. Toyota believes that developing the next generation technologies will require massive investments over many years. It also believes that the current state of investment practices, the prevalence of roaming funds and the general emphasis on short-term stock prices, all work against the required investor stability for such long-term undertaking.
“As a result, we have determined that, in raising capital for research and development of next generation technologies, it is desirable to match to the extent possible the period in which investments in research and development contribute to our business performance with the period in which investments are made in us by investors. To that end, we have decided to issue the First Series Model AA Class Shares with voting rights and transfer restrictions that assume a medium to long term holding period”.
Reference document of the 111th ordinary general meeting, p.32
In a historical vote on June 16th 2015, Toyota shareholders adopted with a 75% majority the proposal to issue Model AA Class Shares. These shares will be sold only in Japan; they will not be listed, but will have voting rights. They will be priced at 120% of the ordinary shares and will be paid a dividend at a rate lower than ordinary shares but at an increasing rate every year. The company will commit to buy back the shares at the original price after five years. But at that time, holders of these shares will have the option of converting their shares into ordinary common shares at a conversion ratio yet to be determined.

Toyota will thus enlist the support for at least five years of patient shareholders, mostly Japanese retail investors, in order to pursue fundamental research into future technologies. It will raise an initial US$4 billion and is authorized to issue up to US$12billion of these shares for that purpose. If that endeavour is successful, all shareholders will benefit; of course, the impatient and the fickle may miss out but won’t be missed.
There seems to be no legal impediment for a Canadian company adopting this type of capital structure provided, alas, it gets the support of its actual shareholders.
Many “foreign” pension funds voiced their opposition to Toyota’s proposition. The influential CalSTRS (the pension fund of California teachers), Ontario Teachers’ Pension Plan, the Florida State Board of Administration, and somewhat surprisingly, Canada Pension Plan Investment Board (CPPIB) have all declared their intention to vote against the new Toyota shares.

As the CEO of the CPPIB has been doing an active and persuasive advocate of long-term investment agenda, one would have expected the CPPIB to support an innovative capital structure designed to draw in long-term investors and partly shield the company from the short-term pressures of financial markets. It appears however that the CPPIB still clings to the obsolete notion whereby two classes of shares are a capital sin that “can entrench management against shareholder pressure for change” (CPPIB proxy voting guidelines). Which shareholders and what change are questions best left unanswered.

In a rare instance, the two largest proxy advisory firms issued opposing recommendations to their clients. ISS recommended voting against the Toyota proposal while Glass Lewis came out in favour of it! ISS, it seems, worries that “a rise in the number of stable investors could lead to overly cozy relations between the company and its shareholders. This would make it difficult for the market to exercise adequate oversight of the company's management”. So, stable investors are bad; the “market” is always right!

In a press release, CalSTRS Director of Corporate Governance argued that “[…] the new share class proposed by Toyota would be structured as debt instruments, with guaranteed and defined dividend payments. Yet, these shares would also have voting rights equal to those of common stock that don’t enjoy this equity risk exposure shield.” Fundamentally, CalSTRS is also sticking to the dogma about “one-share-one-vote”. One has to wonder if these funds, out of principle, have refused to buy shares of Berkshire Hathaway; Alibaba; Google; Facebook; Groupon; Expedia, UPS; Tyson; Ford, Nike, The NY Times; News Corp; CBS, Comcast, Blackstone; KKR; Apollo; Pershing Square Holdings, Third Point, etc.

All in all, the Toyota innovation should be closely examined by all who believe that currently dominant capital structures open the door wide to all types of stock market agitators and tourist investors. It is an empirical fact that these sorts of “shareholders” pressure management and boards of directors to deliver quick boosts in stock price, even if it means cutting down on R&#38;D and capital expenditures.

Toyota is thinking “out of the box”. It is high time for institutional investors to clear their own thinking of shackles and cobwebs.

Opinions expressed herein are strictly those of the authors.
]]></content>
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		</item>
		<item>
		<title>Yvan Allaire, the strategist</title>
		<link>https://igopp.org/en/the-strategist/</link>
		<comments>https://igopp.org/en/the-strategist/#respond</comments>
		<pubDate>Sun, 01 Jul 2001 17:34:37 +0000</pubDate>
		<dc:creator><![CDATA[IGOPP Site web]]></dc:creator>
				<category><![CDATA[IGOPP in the Medias]]></category>
		<category><![CDATA[IGOPP in the medias]]></category>
		<category><![CDATA[Gouvernance créatrice de valeurs]]></category>
		<category><![CDATA[Homages]]></category>
		<category><![CDATA[Value-creating governance]]></category>

		<guid isPermaLink="false">https://igopp.org/le-stratege/</guid>
		<description><![CDATA[Yvan Allaire has shaped and crafted the strategies of a number of large companies in Québec. At Bombardier for the last five years, he went form advice to action. Today, he leaves his job as Exective Vice President, but leaves behind solid foundations for the future. &#160; To read the full length article, pleaser click [&#8230;]]]></description>
		<content><![CDATA[Yvan Allaire has shaped and crafted the strategies of a number of large companies in Québec.

At Bombardier for the last five years, he went form advice to action.

Today, he leaves his job as Exective Vice President, but leaves behind solid foundations for the future.

&#160;

To read the full length article, pleaser click here [1]. [2]

[1] https://igopp.org/wp-content/uploads/2019/06/Yvan-Allaire_The-Strategist_Commerce_2001.pdf
[2] https://igopp.org/wp-content/uploads/2019/06/Yvan-Allaire_Le-Stratège_Revue-Commerce_2001_version-recadrée.pdf]]></content>
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