On the day that Steve Forbes was the keynote speaker at a Leadership Calgary ‘CEO of the Future’ Dinner, one of the world’s most famous CEOs, Martha Stewart, was stewing in a courtroom, former Enron CEO Jeffrey Skilling was awaiting his day in court over one of the largest scandals in corporate governance history and former Hollinger International CEO Conrad Black was contemplating his crumbling newspaper empire.
A roomful of business leaders and budding entrepreneurs dining on filet mignon in the Imperial Ballroom at the Hyatt Regency was champing at the bit to hear the billionaire magazine magnate speak specifically about the meaty issues of the day and what can be done about the corporate scandals, corruption and deception on Wall Street.
But there was no Martha, no Jeffrey, no Lord Black. Not even a shot at Eliot Spitzer.
“The news is rather good,” pronounced the editor-in-chief of Forbes magazine.
In a dinner sponsored by Certified Management Accountants Calgary, the former Republican presidential candidate glossed over the hard issues and somehow managed to speak for an hour without mentioning the names of the vaunted cleanup hitters on the Wall Street Black Sox – Martha Stewart (insider trading scandal), Jeffrey Skilling (fraud scandal) and Conrad Black (corporate compensation, etc., etc., etc., scandal).
Nor did Forbes acknowledge the fine work of Spitzer, the New York attorney general who has been taking Wall Street by storm.
(Two years ago, Forbes referred to Spitzer’s probe of Wall Street as “a cynical alliance between ambitious politicians and rapacious lawyers.”)
We haven’t seen this much stick- handling in these parts since Makarov retired.
With all hell breaking loose, this take-no-prisoners Forbes columnist elected to focus on the “moral foundation” of business.
“You succeed (in business) by meeting the needs and wants of other people,” said Forbes, president and CEO of Forbes Inc. “Commerce is a way of taking human ambitions and human energies and channelling them in a way where it just doesn’t advantage you, but where you end up helping others.”
While corporate crooks parade to the courts in handcuffs, Forbes frowns on the repercussions of the take-down on Wall Street.
“We have to be sure in the aftermath that we don’t have people looking over their shoulder before they do something, saying: ‘How’s this going to look in a lawsuit?’ or: ‘How’s this going to look in a courtroom?’
“You’re always taking a risk (in business). This is one of the things in the aftermath of these scandals that we have to be aware of, certainly in the U.S. where we have a virus of trial lawyers. And that virus is worse than mad cow (disease) . . . ”
On that note, a man in the audience (an attorney, no doubt), pumped a fist in the air and piped up loudly in a scolding manner: “Now, now!!”
If you want the meat about the scandalous corporate governance that has severely sapped investor confidence, you may have to shell out for a subscription to Forbes magazine.
Or maybe, like the man in the audience, you just cancel your subscription. Alas, the editor-in-chief seems to be reading the funny papers.
Leftovers from the Steve Forbes Dinner Menu:
* Central Banker Humble Pie: “I’m going to make you central bankers. Take gold. The economists will gag on this, but they’re not speaking tonight. I am. The price of gold is a pretty good indicator of monetary policy. If gold goes below $300 US per ounce, bad. Deflation. If it stays above $400 US per ounce, bad. Inflation. If it eases back to $375 or so, good. That’s all you need to know. Seriously. If you follow that, you’ll be better than what we have in Canada, Europe, Washington, the Bank of Japan. They’re flying blind. And they don’t always miss the mountains.”
* Greenspan Rare (Interest Rate) Chops: “The United States, I think, has a foolish policy in trying to weaken the dollar. For an economy in a country the size of the United States, currency manipulation is absolutely destructive and self-defeating. If the Federal Reserve does not tighten up (interest rates) soon, we will have a mild bout of inflation. I do think that eventually the Federal Reserve will tighten up, probably by May or June.”
* Lean Canadian Bacon: “This year, we (U.S.) will grow about five per cent, in real terms. In Canada, you’re not going to grow nearly as much, primarily because of your currency.”
* SAGE WORDS: “You can learn more about the prospects of a company by looking at the head knockers (CEOs) than you will the balance sheet.”
– BC Forbes, founder of Forbes magazine and grandfather of Steve Forbes.
HOT STOCK: MIST INC.
MIS-TSX $2.74
Up $1.00 (+57.5%) on 248,400 shares (for week ending Feb. 27).
Four years ago, when this company’s stock was
tanking in the dot-com crash, it changed its name from NBC Technologies to MIST Inc. Now that stock in the Toronto transaction solutions company is on fire with a 400-per-cent gain year to date, largely on a turnaround to profitability, MIST is changing its name again. You guessed it! NBC Technologies!
COLD STOCK: Royal Group Technologies
RYG-TSX $13.45
Down $3.27 (-19.5%) on 4,734,500 shares (for week ending Feb. 27).
When the RCMP, the Canada Revenue Agency and the Ontario Securities Commission are all investigating a company, you don't need Martha Stewart telling you what to do with your shares. You dump them – just as shareholders in the Woodbridge, Ont., manufacturer of home-building supplies did as news broke of the
investigations. Even the analysts were screaming sell.
