Lisa Kassenaar wrote an insightful piece for Bloomberg (December 29th) that examined how corporate boards, even in the era of Sarbanes-Oxley, have often failed to live up to their responsibilities.   Kassenaar wrote,

As the credit crisis gripping the global economy stretches into a third year, corporate directors are facing a storm of scrutiny for the instances when they’ve failed to show up — to sound the alarm as imprudent investments piled up at Citigroup or Bear Stearns Cos., for example, or to right the strategy at General Motors Corp. as the company was losing touch with car buyers’ tastes and burning through cash…

… Nell Minow, who has been agitating for better corporate governance for two decades, says directors remain too friendly with their executives. Minow, who founded the Corporate Library, a research group in Portland, Maine, wants companies to make it easier to replace directors by giving shareholders a vote on every board member every year.

The gist of the piece is a battle remains between corporate governance advocates and shareholders versus executive management and boards.  Read the piece for yourself and make up your mind on what side you stand.  I remain in Minow’s corner.  It is likely the new Obama administration will implement new regulations upon boards and management that come closer to corporate governance advocates.

Matthew Kirdahy wrote a piece in Forbes yesterday that examined a number of highly successful CEOs not generally covered by the financial press.  Kirdahy focused on eight CEOs:

John B. Hess, HessJohn B. Colson, Quanta Services  Robert Parkinson, Baxter International   David A. Smith,  PSS World Medical  Richard Leeds, Systemax  Paul Dykstra, Viad  Dean Foate, Plexus  William Sullivan, Agilent Technology  

The CEOs listed and their companies are worth a quick read.

Yesterday the Financial Times ran an interactive audio/video piece on the many financial CEOs that took it on the chain over the last year.  It’s a sad piece but worth a quick look-see.

This week our Off the Record picks come from our special focus on Gold & Precious Metals. We spoke with analysts and CEOs in this space who gave us their anonymous picks in this space:

1. Goldcorp (GG) - “They’ve got a very good track record of building out projects, drilling them out and growing them geologically. We think they’ve done a very good job in that regard.”
2. Kinross Gold (KGC)- “As a major we like Kinross Gold. They have a great growth profile in terms of major new projects coming on stream this year and over the next two or three years. And they’re very well capitalized and we just like their growth profile and their cost structure.”
3. Yamana Gold (AUY)- “I would say it’s Yamana Gold. Their consolidation plan has been absolutely extraordinary and they’re positioned well in the market today.”

For the complete Gold & Precious Metals report, including a complete examination of this space, and where it’s headed in 2009 in addition to more stock picks, click here.

In our special focus on Gold & Precious metals, we spoke with analyst Peter Schiff of Euro Pacific Capital. While Mr. Schiff is a gold analyst, he talked to us a little bit about the current economic crisis in broader terms and what it’s going to mean for the world at large.

According to Mr. Schiff, “the global economy…is going to be better off without having to support the US economy.” He claims that whole idea of countries lending resources to the US and supplying the US with resources was predicated on the idea that the health of global economy depends on the strength of the American consumer. According to Mr. Schiff, the current financial crisis is going to prove this to be a fallacy- which will lead to a boom in global markets, that begins- unfortunately- with inflation in the US and around the world.

Schiff sees this outcome as inevitable, and that the US is going to have to “learn what it means to save and produce and save and it’s going to be a very difficult transition.” that will be fought tooth and nail by the government.

When asked about whether the shift to the new administration was going to help the US economy, Mr. Schiff had this to say:

Mr. Schiff: No. They’ve just made it worse. As far as I can tell, Barack Obama is committed to a course of total economic destruction. He doesn’t realize that. He doesn’t understand what the problem is, and he doesn’t know what the solution is. He thinks that this collapse is the problem. However, this is the consequence of the problem; this is the tough medicine working. The problem is the bubble economy that we lived under for many, many years and any attempts to try to re-inflate it are not only destined to fail, but they’re going to make the situation much worse.

For the complete Gold and Precious Metals issue, including a complete overview of this sector and how its performing in this turbulent climate, as well as stock picks, click here.

Heidi Moore wrote a piece in today’s Deal Journal in which she examined the assessment of a number of top CEOs for their management and deal making skills.  Moore’s piece focused on a number of other articles recently written by academics, her own colleagues at the Wall Street Journal and management gurus who have separately assessed a number of the top CEOs. Check out the story or least take a look at the CEOs mentioned.

Klaus Kneale has written a brief apologist piece in Forbes on chief executives and the particular problems they and their companies currently face.  According to Kneale,

The title of chief executive has become fraught with peril. All blame, no reward. Every chief executive, good or bad, is overpaid. (According to whom? Everyone, apparently.) Grabbing the reins of a distressed company will be a sure-fire way to get publicly villainized and possibly sued. Turnaround artists who are chief executive candidates will ask, “Can I have the same powers and responsibilities but a different job title?” No.  

Check out the short piece, it’s worth a quick read.  While I don’t personally agree with Kneale’s conclusions I have found it useful to read how he views their role. 

The recent news from Apple that Steve Jobs has issued a last minute cancellation of his keynote at the upcoming MacWorld event stirred new speculation on his health and what it might mean to Apple.  Rather than explore Jobs’ health status for which I have nothing new to bring to the issue, the real question remains what it might mean for Apple should he leave.  While many people have viewed the loss of Steve Jobs as Apple’s CEO as near cataclysmic, Justin Scheck and Neal Wingfeld of the Wall Street Journal wrote a piece that was far more circumspect over the consequences of Jobs leaving the company.  According to the story,

What if that situation does change? There is reason for optimism, based on the evolution of the team that develops Apple’s hardware, software and services, some people familiar with the company’s internal workings say. Some of them believe the group is now strong enough that, barring an exodus of top talent, the company could keep churning out innovative products without Mr. Jobs.  

Mr. Jobs did not respond to a request for comment…. 

In one possible sign of confidence in the management team, an unprecedented number of executives presented during the company’s press event to unveil its new MacBook lineup in October, though Mr. Jobs still dominated the event. 

… Mr. Crow contends that Mr. Jobs has now hired or elevated enough people whose product vision mirrors his that the company could continue to thrive. Mr. Ive is particularly in tune with Mr. Jobs’s thinking, he notes. Mr. Jobs’s sensibilities are also so deeply ingrained in lower-ranking designers and engineers that “a lot of people there will say ‘gee, what would Steve think about this,’ when Steve really isn’t thinking about it,” Mr. Crow says. 

Rick Devine, an executive recruiter in Silicon Valley with Devine Capital Partners, thinks Apple could continue to thrive in a post-Jobs world, predicting that the company will depend more on execution in the coming years than the kind of radical reshaping Mr. Jobs engineered over the past decade. Mr. Devine helped recruit Tim Cook, now Apple’s chief operating officer, to the company more than a decade ago.

 The authors make a good case for further success at Apple even without Jobs as long as key management talent remain.  To get the full story check out the entire article.

For our top picks this week, we’re looking somewhere many investors overlook: our neighbor to the south, Mexico. This week here at TWST we did an interview with Juis Luis Gomez Pimienta, as well as other portfolio managers involved in managing The Mexico Fund. They recommended the following companies, all of which are core holdings in The Mexico Fund:

1. Grupo Televisa (TV)- “[Grupo Televisa is] the most important Spanish-speaking media company in the world and we believe that even in this tough environment, this company, with relatively low leverage and steady cash flow, represents a good opportunity. If you compare the portfolio on July 4 to the portfolio on October 16, you’ll see that the cash position was significantly increased — to around 17% of its assets versus 3% to 5% for the last five years.”
2. America Movil (AMX)- “It is the most important Latin American wireless company with an important operation in Mexico, Argentina and several others in Latin America.”
3. Kimberly-Clark de Mexico- “A subsidiary of the Kimberly-Clark (KMB) in the US, represents 2.6% of the Fund’s portfolio. We are now looking at companies with strong balance sheets, with steady cash flows and low leverages; that’s the focus of the portfolio right
   now.”

For the complete investing strategies report, including a full interview with the managers of the Mexico Fund, as well as portfolio managers from a variety of different specializations, click here.

Yahoo’s CEO guessing game to replace Jerry Yang continues unabated.  First it was Jon Miller of AOL, then Arun Sarin, former CEO of VodaPhone, and on and on.  According to Nicholas Carlson of Silicon Alley Insider the latest name to resurface is John Chapple, the former Nextel CEO and ally of Carl Icahn.   According to Carlson,

Everyone we’ve talked to recently is betting on former Nextel CEO John Chapple, who joined the board with Carl Icahn in August. 

 Unless Yahoo/board has a potential deal in place, I am skeptical of Chapple’s chances for the position.  I anticipate a surprise appointment.  Stay tuned.  For more:  Bloomberg  India.com  All Things Digital Boomtown   Silicon Alley Insider