NEW YORK, March 22, 2018 /PRNewswire-USNewswire/
-- The "Corporate Governance" panel on the first day of
Quinnipiac University's eighth annual
Global Asset Management Education (G.A.M.E.) Forum in New York said that external factors such as
climate change will play an increasingly important role in
corporate governance.
Georg Kell, founder and former
executive director of the United Nations Global Compact and
chairman of Arabesque Asset Management, said that business leaders
are having to be increasingly transparent in their environmental
performance, including in their supply chains. "It doesn't make
sense to hide bad stuff anymore," he said. "It will come out."
Kell said that these Environmental, Social and Governance (ESG)
factors, when integrated into investment analysis, are likely to
yield long-term financial benefits. Another megatrend, he said, is
that "natural demographics win out"—without access to clean air and
clean water, companies will reach growth limits. "It's necessary to
internalize these former externalities, regardless of politics," he
said.
Paul Smith, CFA, president and
CEO of the CFA Institute, agreed that ESG factors "will be
essential for any company going forward. Just ask Mark Zuckerberg at Facebook. ESG needs board
oversight and managerial cooperation."
Kell added that ESG "is the baseline from which you should
start." Corporate governance and ESG have seen a mixed result in
international markets, Smith said. It's worked well in Japan, he said, where the government sets
policy and companies follow, but less well in countries and markets
where government is little heeded.
"In some countries, there is systematic corruption," Kell said.
"Good governance in these circumstances is against the odds." He
said that in some parts of Africa,
for instance, progress is being held back by a small percent of
corrupt people. "What you see is reminiscent of Asia 20 years ago," he added.
But not every concept works everywhere. The concept of the
whistleblower has a hard time gaining traction in Japan, Smith said, because of a strong culture
of respect for management and for one's elders. Kell added that
educational reform is also needed, because in some developing
countries students are not encouraged to develop problem-solving
abilities—or learn STEM skills that will benefit them in the global
economy.
Despite a winter storm, the interactive conference attracted
1,500 students, from 49 states and 54 foreign countries.
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SOURCE Quinnipiac University