Daily Archives: May 15, 2017

Global study on CEO trends indicates a significant uptick in CEOs forced out of office for ethical lapses: PwC’s Strategy&

LONDON, May 14, 2017 (GLOBE NEWSWIRE) — The share of CEOs forced out of office for ethical lapses has been on the rise, according to the 2016 CEO Success study released today by Strategy&, PwC’s strategy consulting business. The study, which analyzed CEO successions at the world’s largest 2,500 public companies over the past 10 years, reports that forced turnovers due to ethical lapses rose from 3.9 percent of all successions in 2007–11 to 5.3 percent in 2012–16 — a 36 percent increase, due in large part to increased public scrutiny and accountability of executives.

The increase was more dramatic at companies in the U.S. and Canada. Forced turnovers for ethical lapses at these companies increased from 1.6 percent of all successions in 2007–11 to 3.3 percent in 2012–16 — a 102 percent increase. In Western Europe, the share of CEOs forced out for ethical lapses increased to 5.9 percent from 4.2 percent, and in the BRIC countries, to 8.8 percent from 3.6 percent.

“Our data cannot show — and perhaps no data could — whether there’s more wrongdoing at large corporations today than in the past. However, we doubt that’s the case, based on our own experience working with hundreds of companies over many years,” says Per-Ola Karlsson, partner and leader of Strategy&’s organization and leadership practice for PwC Middle East. “Over the last 15 years, five trends have resulted in boards of directors, investors, governments, customers, and the media holding CEOs to a far higher level of accountability for ethical lapses than in the past.”

The Five Trends Shaping CEO Accountability

  • Public opinion: Since the financial crisis of 2007–08 and the Great Recession that it ignited, confidence and trust in large corporations and CEOs has been declining; the public has become more suspicious, more critical, and less forgiving of corporate misbehavior.
  • Governance and regulation: The rise of public criticism of executives and corporations has translated directly into regulatory and legislative action, and companies in the U.S. and many other countries have moved to a zero-tolerance approach toward bad behavior in the C-suite.
  • Business operating environment: Companies increasingly are (1) pursuing growth in emerging markets where ethical risks, such as the possibility of bribery and corruption, are heightened, and (2) relying on extended global supply chains that increase counterparty risks.
  • Digital communications: The use of email, text messaging, and social media has created new risks for ethical lapses. A company’s digital communications can provide irrefutable evidence of misconduct, and their existence increases the likelihood that a CEO will be held accountable.
  • The 24/7 news cycle: Unlike in the mid- to late 20th century, when most executives and companies could maintain a low public profile, today the lightning-fast flow of Web-based financial news and data ensures that negative information travels quickly and widely.

Despite the global increase in forced turnovers for ethical lapses, companies in the U.S. and Canada have the lowest incidence of such dismissals — 3.3 percent in 2012–16 compared to 5.9 percent in Western Europe and 8.8 percent in the BRIC countries. More stringent governance regulation is one likely reason. Both the legislative requirements for codes of conduct and anti-bribery statutes have been tightened significantly in the United States.

Bigger Company, Bigger Target

The study also found that at the largest companies (those in the top quartile by market capitalization) in the U.S. and Canada and Western Europe, the overall share of CEOs forced out of office was significantly greater than the share forced out in the other market-cap quartiles.

“The fact that forced turnovers for ethical lapses were even higher at companies in the top quartile by market capitalization in these regions supports our hypothesis, since the largest companies are the most affected by the five trends and are subject to the greatest scrutiny,” says Kristin Rivera, partner and global forensics clients and markets leader with PwC US.

“The increasing incidence of CEOs being forced out of office for ethical lapses may have a positive effect on public opinion over time by demonstrating that bad behavior is in fact being detected and punished,” says DeAnne Aguirre, global leader of Strategy&’s Katzenbach Center of Innovation for Culture and Leadership, principal with PwC US. “In the meantime, CEOs need to lead by example on a personal and organizational level and strive to build and maintain a true culture of integrity.”

More Facts from the 2016 CEO Success study

  • CEO turnover: CEO turnover at the world’s largest 2,500 companies decreased from its record high of 16.6 percent in 2015 to 14.9 percent in 2016, due largely to the drop in merger and acquisition activity. CEO turnover was highest in Brazil, Russia, and India, at 17.2 percent, followed by Japan (15.5 percent) and Western Europe (15.3 percent) and China (15.2 percent). CEO turnover fell in every region we studied except for the U.S. and Canada.
  • Women CEOs: There were 12 women globally appointed to the role of CEOs in 2016 — 3.6 percent of the incoming class. This marks a return of the slow trend toward greater diversity that had been in place over the last several years, and a recovery from the previous year’s low point of 2.8 percent. The share of incoming female CEOs was highest in the U.S. and Canada, rebounding to 5.7 percent after falling for the previous three years. Five industries — healthcare, industrials, information technology, consumer staples, and telecom services — did not have a single incoming female CEO in 2016.

About the 2016 CEO Success Study
Over the course of the past 17 years, Strategy& has been tracking continuous data on CEO successions. The 2016 study analyzed CEO successions at the world’s 2,500 largest (by market capitalization) public companies over the last 10 years. For the purposes of this study, we define an ethical lapse as a scandal or improper conduct by the CEO or other employees; examples include fraud, bribery, insider trading, environmental disasters, inflated resumes, and sexual indiscretions.

Ends
To learn more about the 2016 CEO Success study, visit www.strategyand.pwc.com/ceosuccess. A copy of the global study, including findings by geography and industry, is available from the media contact. Multimedia content, including infographics and video, is also available.

About Strategy&
Strategy& is a global team of practical strategists committed to helping you seize essential advantage. We do that by working alongside you to solve your toughest problems and helping you capture your greatest opportunities. We bring 100 years of strategy consulting experience and the unrivaled industry and functional capabilities of the PwC network to the task. We are part of the PwC network of firms in 157 countries, with more than 223,000 people committed to delivering quality in assurance, tax, and advisory services.

Notes

  1. For more information, visit www.strategyand.pwc.com/ceosuccess.
  2. © 2017 PwC. All rights reserved. PwC refers to the PwC network and/or one or more of its member firms, each of which is a separate legal entity. Please see www.pwc.com/structure for further details.
Contact:
Kiran Chauhan
Global Public Relations
Strategy&, part of the PwC network
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[email protected]

Myanmar Police Detain Two Others in Yangon Violence Between Buddhists And Muslims

Myanmar police on Monday detained two more suspects for their involvement in a confrontation between Buddhists and Muslims last week in a Yangon neighborhood where monks had claimed that ethnic Rohingya Muslims were hiding illegally.

Meanwhile, police continue to search for three others believed to be involved in the melee that left two people injured.

Police apprehended Tin Lin Htike and Tin Htay Aung who were involved in the incident in Mingala Taungnyunt township in the east-central part of the city, when the two men went to the Eastern Yangon Police Station, Tin Lin Htike wrote on his Facebook page.

On Monday, they received a period of remand at Mingala Taungnyunt Township Court along with notice that their trials would be held on May 22.

The pair will be tried along with others arrested last week, including Tin Htut Zaw and Ma Aung, both of whom were apprehended on May 11.

On that day, Myanmar police apprehended and charged two monks and five Buddhist nationalists for their involvement in the confrontation, during which police secured the neighborhood and fired warning shots in the air to disperse a crowd that had gathered after an altercation between monks and Muslim residents.

They face charges of incitement to commit violence under section 505(c) of the country’s Penal Code, which carries a penalty of up to two years in prison and a fine.

Monks from the Patriotic Myanmar Monks Union, also known at Ma Ba Tha, had received information that some Rohingya were hiding in a building in the township, and they alerted police and immigration officials who searched the premises on May 9.

Myanmar’s Buddhist majority views the Rohingya, a stateless group of 1.1 million who live mainly in the country’s western Rakhine state, as illegal immigrants from Bangladesh, and government policy has denied them citizenship and access to other basic rights for decades.

After a search, police determined that the occupants were there legally and took no further action against them.

Different witness accounts identified either Muslims who live in the area or a group of nationalist outsiders with weapons for starting the melee as the monks left the building.

Two men were injured in the scuffle during which local police fired shots into the air to disperse the crowd.

Police are still looking for two other monks�Thuseitta from the Patriotic Young Monks Union who had given an eyewitness account to RFA’s Myanmar Service, and Pyanyar Wuntha�and a third alleged participant named Myat Phone Mo.

Threat to destroy neighborhood

In the meantime, authorities have increased security in Mingala Taungnyunt amid a threat circulating on social media that said the area would be attacked and destroyed on Monday.

Local authorities, lawmakers, police officers, members of the pro-democracy 88 Generation Students Group (now known as the 88 Generation Peace and Open Society Group), and residents are now working together to prevent further unrest in the area.

Nilar Thein, a democracy activist and political prisoner who was imprisoned for participating in the pro-democracy protests of 1988, told RFA that the post about the razing of the township on May 15 was made on Facebook under the name Wirathu with a photo of an unidentified monk.

Wirathu is a prominent monk in the Ma Ba Tha movement, who is known for his fiery anti-Muslim rhetoric.

We came here as a democratic force to solve together any problems we have in this area, she said.

Former member of parliament Phyu Phyu Thin, who lives in Mingala Taungnyunt township, told RFA that those who tried to foment unrest on May 9 posted the threat on social media because local residents tried to protect their neighborhood.

We heard that they [those who initiated the confrontation] got angry after their unsuccessful effort, she said. Afterwards a Facebook post said that they would destroy Mingala Taungnyunt township on May 15.

We don’t know whether this account is real or not, she said of Wirathu’s Facebook page. All forces [lawmakers, police, and local residents] are now working together to prevent unrest in the neighborhood.

Tin Aye, the administrator of Southern Kandawlay ward in Mingala Taungnyunt township, said officials have warned residents not to possess any weapons such as wooden sticks or knives to protect themselves from any attacks because authorities can take action against them under the country’s weapons act.

We told them we are here to protect them, and they just need to check that there are no strangers in the township, he said.

Copyright (copyright) 1998-2016, RFA. Used with the permission of Radio Free Asia, 2025 M St. NW, Suite 300, Washington DC 20036

Asian Lawmakers: Region Pivotal in Fighting Climate Change

HO CHI MINH CITY � Asian lawmakers say their region is pivotal to any global efforts at limiting climate change and they are committed to finding solutions.

At a just concluded meeting of the Inter-Parliamentary Union (IPU) in Vietnam, lawmakers from countries across the region gathered to share their fears stemming from hotter global temperatures – as well as what to do about it – from incorporating the input of indigenous peoples, to carving out underground reservoirs for times of flooding.

Climate change has no passport, IPU Secretary-General Martin Chungong said at the three-day meeting in Ho Chi Minh City, which ended Saturday. It’s cross-national.

The host city also exemplified why the Asia-Pacific region is at the center of environmental concerns worldwide. The region has one billion urban dwellers, more than the rest of the globe combined, according to the U.N. Development Program. And urbanites have an outsized impact on their ecosystems.

Ho Chi Minh City, a massive metropolis of 10 million people, generates waste and consumes water at a volume equal to 17 times the average across Vietnam, said the city’s Communist Party chief, Nguyen Thien Nhan.

He later led the parliamentarians down to the Mekong Delta to plant mangrove trees and witness the coastal erosion of what Vietnam says is among the world’s top three deltas threatened by climate change.

Thai officials told VOA they would be planting mangroves after they returned from the Vietnam trip, too.

The most imminent threat to Thailand in terms of climate change is first, of course, deforestation and the reduction of green [areas] in Thailand, Chaiyuth Promsookt, chair of the Thai National Assembly’s committee on natural resources and environment, said on the sidelines of the conference.

He said the government set a goal of maintaining at least 40-percent forest cover over the next two decades. The mangroves are meant to help reach that target, as well as guard the coasts from erosion.

Another measure is to shift ethnic minorities toward cherry and apple farming to discourage illegal logging. Chaiyuth said this would effect a fair distribution of income and distribution of the outcomes of development.

His majesty the late king believed that this would be more inclusive in terms of development, in terms of joining the people, especially the underprivileged people in the rural areas, he said.

That’s also in keeping with a suggestion from Anna Schreyoegg, climate change policy and mitigation adviser at GIZ Vietnam, a German-based development agency. She recommended officials craft environmental policy that incorporates scientific evidence, as well as input from indigenous groups and women.

Deforestation is cause for concern in Laos, too. The small country may seem immune to climate change because it is landlocked, unlike the island constellations of Indonesia and the Philippines, and the long coastlines of Vietnam and Myanmar. But the lost trees are raising temperatures in Laos, according to Sanya Praseuth, vice chair of the Laos National Assembly’s economic, technology and environment committee.

Our country [is] getting hotter comparing with the previous years, he told VOA. And the typhoons are not coming as we’re expecting, as in each season. And that is a change that we cannot predict, and that is a main problem.

Laos is trying to curb the problem by suspending logging permits.

But Indonesian parliamentarian Siti Hediati Soeharto suggested developing nations could only do so much. She said rich economies have a greater responsibility to stem greenhouse gas emissions, as well as provide aid for climate change efforts in the developing world.

Indonesia is of the view that developed countries should continue taking the lead, she said.

Source: Voice of America