The recent collapse of two hedge funds at Bear Stearns Asset Management raises two questions few people can answer. How did they lose so much money so quickly? And where else are similar problems buried? The unsatisfying answers illustrate why markets suddenly have become so volatile.
Since the beginning of the new era in corporate governance that began with the passage of the Sarbanes-Oxley Act (SOX) in 2002, the focus of governance activity has shifted among the various required standing committees of the board of directors: the audit, compensation and nominating/corporate governance committees.
In the more than five years since the federal Sarbanes-Oxley act was passed, the law, which set more stringent standards for public companies and their directors, has dramatically changed the internal machinations and accounting of public businesses.
Until fairly recently, if you were a director or a shareholder at a public company, the answer to that question would have been a definitive "no!" Contact between the two groups was discouraged and, in some cases, even prohibited. However, the era of increasing shareholder activism is turning that truism on its ear and shareholders are now pushing open the door to the boardroom. Thus, the concept and focus for "Directors Forum 2008: Directors, Managers & Shareholders in Dialogue" - Jan. 13-15 in San Diego - is unique for corporate governance gatherings in that it brings together diverse groups to encourage meaningful discourse.
If only every corporation had a formula for guaranteed success. An E = MC squared, for business, perhaps.
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Corporate governance and succession planning are in the spotlight in this special section in collaboration with Corporate Directors Forum.