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Integrity - use of values or principles to guide action in the situation at hand.

Below are links and discussion related to the values of freedom, hope, trust, privacy, responsibility, safety, and well-being, within business and government situations arising in the areas of security, privacy, technology, corporate governance, sustainability, and CSR.

Hollinger offers a cautionary tale, 26.11.03

Why it has found itself in the governance quagmire it now faces.


In the company's assessment, its failure to 'identify, prevent or fully disclose' transactions that are at the centre of its current scandal is the fault of three factors: the presence of the same executives managing both Hollinger International and its parent company, Hollinger Inc.; the lack of a clear policy for dealing with related-party transactions; and the absence of a policy that related-party deals must be negotiated by officers who do not have a significant personal interest in the outcome of the deal.

For a company that has never paid much attention to new-fangled ideas of full disclosure, this small paragraph of honesty was revolutionary. It was a clear attempt to signal that a new guard is running the shop and is willing to criticize bluntly the old ways.

Other companies can extract some broader lessons from Hollinger International's mea culpa, even if few of them have such astoundingly weak procedures that they would require a full Hollinger-style overhaul."

Selected highlights:

  • Don't do related-party deals.
  • At least follow your own bare-minimum requirements for such deals.
  • Set up procedures for related-party deals that go beyond the basic requirements.
  • Make them contain checks and balances to avoid nasty surprises.
  • As well, Hollinger International said any related-party deals will have to be approved by two signing officers who are not related to its parent company.
  • But all companies should look at doing far more than this to ensure related-party deals are fair for all shareholders, and not just a controlling shareholder.

    Further SEC requirements:

  • Companies must spell out many details of their related-party deals, including the anticipated effect and the full "nature of the benefit that will accrue" for every person or company involved.
  • Companies must also disclose information about the approval process the board followed.
  • They must disclose any contrary views on the board, or whether there were any directors who abstained from supporting the deal.
  • Companies should also disclose whether they struck a special committee to review the deal, and whether the board accepted or disagreed with its recommendations.
  • Companies should go further and get independent valuations done -- or independent fairness opinions -- of any significant transactions.
    (not a complete list)

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    "We shall need compromises in the days ahead, to be sure. But these will be, or should be, compromises of issues, not principles. We can compromise our political positions, but not ourselves. We can resolve the clash of interests without conceding our ideals. And even the necessity for the right kind of compromise does not eliminate the need for those idealists and reformers who keep our compromises moving ahead, who prevent all political situations from meeting the description supplied by Shaw: "smirched with compromise, rotted with opportunism, mildewed by expedience, stretched out of shape with wirepulling and putrefied with permeation.
    Compromise need not mean cowardice. .."

    John Fitzgerald Kennedy, "Profiles in Courage"


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