Change the tone of voice. Malcolm Turnbull is sounding increasingly shrill and carping as his popularity goes down, with the result that his opinion poll numbers are likely to fall even further. There is a potential solution — albeit one he is unlikely to adopt. The AC Nielsen poll in this morning’s Fairfax papers strongly suggests that Australians are not in the mood for opposition. There is broad support for the way Kevin Rudd is running the country and little interest in listening to criticism of him. Thus the best policy for this Opposition would be to stop opposing and predicting dire consequences from the Government’s actions. Ultimately it will be the result of those actions that will determine the future electoral outcome. There are no votes in being able to say we told you so. So Malcolm Turnbull should stop being so strident with his daily commentary and take a lesson from his colleague Peter Costello who makes only the occasional foray into the media.
Perhaps he should visit China. The Opposition Leader is no stranger himself to trying to get a few favours from that authoritarian regime in China. His 1995 visit to Dalian province where he met then city mayor Bo Xilai is well remembered. The then merchant banker was acting on behalf of a group, which included former NSW Labor Premier Neville Wran, that was trying to get permission to mine gold in the region. The request was unsuccessful not because of the forceful Turnbull manner but because of potential damage to the water supply from mining. Bo Xilai, now the Chinese Commerce Minister, would surely be happy to overlook the anti-Chinese sentiments of the last week and renew the acquaintance.
Ask Rupert. The Sydney Sunday Telegraph seems to think that any Chinese woman who meets a politician is a potential Mata Hari.
I am waiting for the page one expose in The Australian and The Times that tells us how the cunning Chinese have infiltrated News Corporation.
Let’s solve something completely different. There’s little likelihood of anything being achieved by the Group of 20 this week to lessen the impact of the global financial crisis, so the world leaders are desperately searching for something else they can agree on. Reports from London overnight suggest that the chosen face saver is to take uniform action to try and get rid of tax havens. Now that might be a very good thing to do but it has little or no relevance to stopping the world sliding in to an even deeper recessionary state.
On the contrary it is quite possible that causing an upheaval in international banking arrangements at this time of monetary turmoil will in the short term make things worse. That is a risk that politicians like our own Prime Minister Kevin Rudd, who have talked up the importance of the G20 gathering, are prepared to take as they don’t want to look impotent and simply announce that the only agreement is to meet again some time in the future.
The News Corp bonkability index. A new height (or should that be depth) was reached this morning on the news.com.au website.
Academic proof of the costs of fame. Financial journalists have been drawing attention for years to anecdotal evidence suggesting that fame and publicity for business chiefs and the future fortunes of their companies do not go well together. Now has come the academic proof. Ulrike Malmendier of UC — Berkeley and Geoffrey Tate of UCLA have recently published their study Superstar CEOs after looking at the records of all those chief executives touted in major business publications as being the best and the brightest. The two academics and backed up the following conclusions with a range of statistical evidence:
We show that CEOs who win awards exhibit drastic changes in behavior and performance:
- Firms with award winning CEOs suffer declining performance. This decline is observed in stock performance for the three years following the award, in return on assets over the same horizon, and in the ability to meet market earnings expectations. The decline is also observed both relative to the firm’s own performance prior to the award and to the performance of similar firms in which the CEO did not win an award.
- Superstar CEOs extract higher compensation from the firm, largely in the form of stock and stock options. They obtain significant and economically meaningful increases in total compensation in the years following their award despite sub-par firm performance. Further, this increase in compensation seems to occur mostly in badly governed firms.
- Superstar CEOs increase their indulgence in tasks which provide private benefits, but have little (if any) influence on firm value maximization. They are significantly more likely to author books and sit on outside boards in years after they have won an award, relative to years before they won an award.
- Superstar CEOs are more likely to manage earnings, and ultimately to experience negative earnings after several years have elapsed following their last award. The incidence of earnings management increases both relative to years before the CEO won the award and relative to CEOs who never won an award.