Corporate Governance, Going to Jail, and Investor Relations

22 May 2007

William Sorin, the former senior general council at Comverse Technology was sentenced to jail a couple of weeks ago for his role in the company’s options backdating scandal.  The former CFO, David Kreinberg, will soon be sentenced for his role in the scandal.  Meanwhile, former CEO and Chairman, Kobi Alexander is living in golf club community in Namibia.  To date, the United States has been unsuccessful in extraditing him back to the U.S. for trial.

When a company has corporate governance blunders life becomes very difficult for the IR department.  Heck, in some cases the IR professional gets thrown under the bus along with the infringing executive(s) (such was the case at Siebel).  It’s tough to defend executives when they plead guilty.

On the flip side, there are many companies out there that do a very good job with corporate governance.  In those cases, it is important for the IR department to boast about the company’s exceptional credentials.  There’s nothing wrong with occasionally screaming from the mountain tops that your corporate governance record is excellent.  While many in the investment community may look at this as a necessity rather than something that should be marketed, the reality is that every industry will have its corporate governance dog.  When news surfaces about corporate governance blunders in your company’s industry you need to be able point to your past bravado about your company’s stellar record.  Before you know it, that pride that IR showed when boasting about good governance in the past becomes a competitive differentiator in the present.

3 Responses to “Corporate Governance, Going to Jail, and Investor Relations”

  1. Marjan

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  2. Marjan

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  3. Parthiv

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