5 décembre 2010

« Governance at Maple Leaf Foods »

Yvan Allaire | IGOPP

« Being subjected to a lesson in governance by a hedge fund, as the Maple Leaf Foods Corporation has to endure, is somewhat akin to being lectured on abstinence and modesty by the residents of the Mustang Ranch bordello in Nevada.

Hedge funds, more appropriately called “speculative funds” in most cases, have resisted all efforts of regulators to shed some light on their murky operations; by the standards imposed on public corporations, their governance ranges from poor to non-existent; investors, who risk their money on their adventures, get to sit, not on a board of directors, but merely on “advisory committees”.

Whenever a private equity/hedge fund decides to become listed on a stock exchange, as Blackstone and KKR have done, they grab on a loophole, becoming publicly listed limited partnerships, which shields them from most governance obligations imposed on other corporations, including the requirement of a board made up of a majority of independent directors!

Hedge funds demand egregious fees for questionable performances (see Dickey, I.D. and G. Yu (2010); Ibbotson, R.G. et al. (2010)). Their general partners make unconscionable amounts of money, yet cast a critical eye on executive compensation ». […] Lire la suite