News digest for July 19, 2006

Fed Governor: Sarbox Distracting Firms from Growth Investment
Complying with Sarbox has diverted funds “and, probably even more importantly, some of the attention of chief executive officers and boards of directors from capital spending and R&D plans.”

Keep an eye on fund managers’ votes
If you’re an attentive investor, you know how your mutual funds did last quarter. If you’re very, very attentive, you know how the funds’ managers voted in proxy contests.

Japan eyeing curbs on ‘death spiral’ finance
Death spiral financing, which involves the sale to investment banks of high-risk securities known as moving strike convertible bonds (MSCBs), can quickly deliver needed cash to an issuing firm at the expense of its share price.

Investor Engagement on the Rise in Europe
Of the shareholder proposals filed thus far, a majority–57 percent–were board related, such as proposing shareholder nominees to the board (46 percent of all shareholder resolutions), attempting to remove an existing director (3 percent), requiring a majority of independent directors on the board (1 percent) or introducing an age limit for board members (1 percent).

IFC Launches New Sustainability Web Portal
The International Finance Corporation today launched its new Sustainability Web Portal (http://www.ifc.org/sustainability) to connect visitors to IFC’s full range of sustainability products and services.

UN Advances Business Case for Materiality of SRI, Leaving Skeptics Little Wiggle Room
A new UNEP FI report assesses how investment banks are integrating environmental, social, and governance factors and linking them to financial performance in their research.

Senior managers: you can’t keep ignoring the Web
The Web has become mainstream. It needs to be professionally managed. Otherwise it becomes a dumping ground.

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