In several posts, particularly those concerning Japan, I've stressed the importance of Western style corporate governance.
Specifically, that it's important to make sure the management of any foreign company you're buying stock in is committed to growing shareholder value.
The polite term people use for this is "Western style corporate governance."
What they REALLY mean is Anglo-Saxon Capitalism.
Right now, some of the fiercest resistance to this shareholder-friendly way of doing business is taking place on Continental Europe. Particularly in France and Germany.
That's why I find this article in today's Financial Times especially interesting:
"Tweedy Browne, the influential US activist fund manager, is so concerned by the state of corporate governance at carmaker Volkswagen that it is considering scrapping or scaling back its investments in Germany."
The rub is over VW's non-executive chairman, who also is a controlling shareholder of Porsche. And Porsche just happens to be VW's largest shareholder. Porsche and the non-executive chairman are running VW in a manner disregarding the interests of all shareholders.
"'It is an intolerable kind of situation. It raises the question of whether you should invest any kind of money in Germany,' said William Browne, managing director at Tweedy Browne, which has about $700m invested in nine German companies and is one of VW's six largest investors with about 1 per cent."
Browne went on to say:
"'I don't think there is another country in the world other than maybe China where this would happen.'"
Maybe the rest of the Continental Europe is improving.
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