Transcript Slide 1

Savings Banks and Foundations,
contribution for a sustainable society
“Savings banks: the retail gateway to a global market.
Driving sustainable development”
Laurel E Grossman,
Chief Executive Officer,
RepuTex Group of Companies, Australia
21 – 22 September 2006, Kuala Lumpur
REPUTEX IN ASIA
What is RepuTex?
• RepuTex is the brand of the RepuTex Group of companies;
• RepuTex is based in Melbourne, Australia and has
subsidiary companies in Hong Kong and Shanghai;
• RepuTex is chaired by Mr Graeme Lee, former Managing
Director of Standard & Poor’s Australia Pacific.
• RepuTex has a strong commitment to the delivery of ratings
and research services on Asia to financial markets
worldwide.
RepuTex has ratings for over 400 companies worldwide but the
spread across Asia is currently very small. This is indicative of
the slow take up of sincere engagement with CSR in Asia.
RepuTex Ratings –
Country Coverage (Top 5)
RepuTex Ratings –
Continent Distribution
Asia
1%
North America
30%
Australia
Oceania
36%
USA
United Kingdom
Germany
New Zealand
France
Europe
33%
0
50
100
150
THE REPUTEX RESEARCH FRAMEWORK
The RepuTex Research Framework: China delivers
the first universal framework for socially responsible
business conduct in China.
The framework is the result of a China-based
research project conducted by RepuTex with
assistance from Fudan University and the Chinese
Academy of Social Sciences.
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THE RESEARCH PROJECT
The research process was conducted over a six-month period
commencing June 2005.
The objectives of the project were:
•
To define CSR principles and practices as they apply to
China’s current level of development;
•
To provide an easily understood framework to guide CSRrelated activities for business, media, government and
community organisations in China;
•
To support RepuTex delivery of CSR and corporate reputation
research and rating services in China.
2
THE REPUTEX GLOBAL MODEL
RepuTex uses a series of key factors for the global conduct of its
ratings.
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PARTICIPATION
An important feature of the RepuTex Framework: China is that
it has been prepared in consultation with in excess of 150 major
business, community, academic and government stakeholders in
China.
3
THE REPUTEX RESEARCH FRAMEWORK
4
METHODOLOGY PHASES
Consultations
To accommodate the Chinese setting, five options were designed for
stakeholder participation and engagement:
1.
2.
3.
4.
Direct phone interviews in Chinese language;
Private appointments;
China consultation sessions, in collaboration with the IFC;
Teleconference sessions with a number of international
organisations;
5. An input facility on the RepuTex website.
Other Data Collection
Fudan University also undertook an extensive search and provided
input through analysis of government proclamations, media issues and
other research databases on related topics.
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Customers
• RepuTex sells its ratings and information to
companies. It also sells the information obtained
from its rating processes and other research
projects to third parties. Its customer base includes:
• Investment and trade agencies
• Listed companies
• Private companies
• Multinational corporations
• Fund managers and institutional investors
• Supply chain managers
• Government business enterprises
• Government departments
Business Benefits
Many companies are now recognising the link between social and financial
risk
Today, most reputation issues can be linked to a company’s corporate social
responsibility (CSR) profile. Investors want to know how well a company is
managing and controlling environmental, community, workplace and governance
risks because these risks have a direct link to financial performance.
Risks
vs.
Opportunities
The RepuTex Share Index
REXmetrics®
• Over the course of 2006 RepuTex has
undertaken research to develop systems to
deliver risk exposure and performance
information to financial markets.
• Called REXmetrics®, the new technology
platform delivers real time company risk and
exposure (REX) data. Information is delivered
via AQUA financial software, a leading
information manager and analytics tool currently
used by financial houses.
Market Research and Surveillance
Investors cited four key challenges of investing in China today:
• The corporate ownership structure and resulting conflicts of interest
between insiders and minority shareholders.
• Lack of independent directors.
• The lack of regulations and enforcement to prevent abuses and
protect the rights of minority shareholders.
• The lack of transparency and disclosure.
Source: Special Report: China, the next global hot spot of corporate governance?
Institutional Shareholder Services, 2006
Market Research and Surveillance
Lack of transparency compounds the investment risks even
further, as these comments made clear:
“A public company’s internal operation is like a black box. We have
no idea about it.”
CHIEF INVESTMENT OFFICER OF A CHINESE MUTUAL FUND
“Publicly disclosed information is so poor that we cannot make
investment decisions based on that.”
CHINESE MUTUAL FUND
“I don’t like the financial information disclosure in the China A share
market. We think there are quite a lot of improvements that need to
be made. Public companies do not like to share information with
institutional investors.
Meanwhile, we have concerns about the quality of information.
Hopefully, we can see better disclosure rules in next three years.”
CHINESE SECURITIES FIRM
Source: Special Report: China, the next global hot spot of corporate governance?
Institutional Shareholder Services, 2006
Market Research and Suverviallance
What do you consider to be the main factors
preventing you from investing in Chinese equities?
Source: Market Research - China
RepuTex China, 2006
The RepuTex Standard
Many major international companies feature RepuTex seals on
their websites and reports.
www.reputexgroup.com