Apples and oranges

Comparing apples with oranges is a capital sin in the financial world. If you want a story about a company, check out the profits, if you want the truth look at cash inflows, either way compare likes for likes.
    But these days it seems that another way to see if a company is likely survive is comparing likes for dislikes.
   I have heard a corporate governance expert say that a board of directors’ attitude towards shareholders at an AGM speaks volumes.
    Any dismissive act, any waiving off of a concern automatically qualifies the director for a one way trip to the realm of the past.
    The managers of the future do not dislike a probing shareholder, they keep an eye on them and engage, Mr Governance Guru said, blissfully unaware that a journalist was in hearing shot.
    Whether one can judge an executive from body language or not, is hard to say. It is equally hard to say what board directors are calling a priority these days, but it is fair to assume that they are all keeping an eye on pension schemes showing up at AGMs to vote. And question.
    Last week ABP, the 217 bln eur Dutch civil service pension scheme, pulled its weight to back a request for a new and independent committee at Apple Inc to look at sustainability issues in the long term.
    The scheme went against the recommendation of the board of Apple directors (which includes Al Gore), which recommended a negative vote. The board got its way and the resolution was voted down.
    Three weeks or so ago in Switzerland a similar scene took place, this time at the UBS EGM, where the Ethos foundation, also backed by pension schemes, failed to carry its own resolution calling for extra details on how UBS was hit by the sub-prime crisis the way it was.
    Again the company got its way, but Ethos says its resolution gathered 44 pct of the votes and has now enough to command a meeting with UBS to negotiate. If that does not happen, Ethos says it is ready to refer the matter to arbitration.
    Apple and UBS are two different companies in different countries.
I am mixing apples and oranges? Maybe, but to remain in a horticultural context, it is also about seeds that have been sown. A new species of institutional investors is blossoming.
    More on: http://www.thomsonimnews.com/story.asp?sectioncode=&storycode=36973) http://www.thomsonimnews.com/story.asp?sectioncode=7&storycode=36327

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