Greed is NOT Good!
GREED IS NOT GOOD!
Presented by Richard G. Stone
Founder & President,
Stone & Co. Limited
CIFP Four Educational Streams: Wealth Management  Tax Planning  Estate Planning  Risk Management
Greed is NOT Good!
The point is, ladies and gentleman, is that greed -- for lack of a
better word -- is good.
Greed is right.
Greed works.
Greed clarifies, cuts through, and captures the essence of the
evolutionary spirit.
Greed, in all of its forms -- greed for life, for money, for love,
knowledge -- has marked the upward surge of mankind.
And greed -- you mark my words -- will not only save Teldar Paper,
but that other malfunctioning corporation called the USA.
Michael Douglas as Gordon Gekko in Wall Street
CIFP Four Educational Streams: Wealth Management  Tax Planning  Estate Planning  Risk Management
Greed is NOT Good!
In The News Over 15
Years Later …
CIFP Four Educational Streams: Wealth Management  Tax Planning  Estate Planning  Risk Management
Greed is NOT Good!
CIFP Four Educational Streams: Wealth Management  Tax Planning  Estate Planning  Risk Management
Greed is NOT Good!
CIFP Four Educational Streams: Wealth Management  Tax Planning  Estate Planning  Risk Management
Greed is NOT Good!
CIFP Four Educational Streams: Wealth Management  Tax Planning  Estate Planning  Risk Management
Greed is NOT Good!
CIFP Four Educational Streams: Wealth Management  Tax Planning  Estate Planning  Risk Management
Greed is NOT Good!
CIFP Four Educational Streams: Wealth Management  Tax Planning  Estate Planning  Risk Management
Greed is NOT Good!
CIFP Four Educational Streams: Wealth Management  Tax Planning  Estate Planning  Risk Management
Greed is NOT Good!
What Went Wrong?
CIFP Four Educational Streams: Wealth Management  Tax Planning  Estate Planning  Risk Management
Greed is NOT Good!

Executive compensation grossly
disproportionate to corporate results

Stock promotion (IPOs) that has gone to an
extreme in the creation of very questionable or
unproven business concepts
*Source:
“Corporate Governance” (McGraw-Hill Executive MBA Series 2003, p. 229, authors John L. Colley, Jr. et al.)
CIFP Four Educational Streams: Wealth Management  Tax Planning  Estate Planning  Risk Management
Greed is NOT Good!

Misuse of corporate funds

Trading on insider information, particularly by
managers exercising stock options that have
rewarded short-term thinking
*Source:
“Corporate Governance” (McGraw-Hill Executive MBA Series 2003, p. 229, authors John L. Colley, Jr. et al.)
CIFP Four Educational Streams: Wealth Management  Tax Planning  Estate Planning  Risk Management
Greed is NOT Good!

Misrepresentation of the true earnings and
financial condition of too many companies

Obstruction of justice by concealing activities or
destroying evidence
*Source:
“Corporate Governance” (McGraw-Hill Executive MBA Series 2003, p. 229, authors John L. Colley, Jr. et al.)
CIFP Four Educational Streams: Wealth Management  Tax Planning  Estate Planning  Risk Management
Greed is NOT Good!
Who Were the Transgressors?
CIFP Four Educational Streams: Wealth Management  Tax Planning  Estate Planning  Risk Management
Greed is NOT Good!

Passive, non-independent and rubberstamping boards of directors

Non-accountable CEOs and senior
management involved in serious conflicts
of interest
*Source:
“Corporate Governance” (McGraw-Hill Executive MBA Series 2003, p. 229, authors John L. Colley, Jr. et al.)
CIFP Four Educational Streams: Wealth Management  Tax Planning  Estate Planning  Risk Management
Greed is NOT Good!

Transaction-driven investment bankers and
market makers, and biased and nonindependent analysts

Non-independent public accounting firms
*Source:
“Corporate Governance” (McGraw-Hill Executive MBA Series 2003, p. 229, authors John L. Colley, Jr. et al.)
CIFP Four Educational Streams: Wealth Management  Tax Planning  Estate Planning  Risk Management
Greed is NOT Good!

Regulators paying more attention to the
manifestations of the problem than to the
systemic conflicts of interest that are at the
core of poor governance practices
*Source:
“Corporate Governance” (McGraw-Hill Executive MBA Series 2003, p. 229, authors John L. Colley, Jr. et al.)
CIFP Four Educational Streams: Wealth Management  Tax Planning  Estate Planning  Risk Management
Greed is NOT Good!
Result:

Shoot the messenger

Media always dodges bullet

Investor questions trustworthiness of Advisor

Advisor feels little control
CIFP Four Educational Streams: Wealth Management  Tax Planning  Estate Planning  Risk Management
Greed is NOT Good!
Canadian Reality:
 Canada is ahead of the U.S.
 NI 81-102
 FundSERV
CIFP Four Educational Streams: Wealth Management  Tax Planning  Estate Planning  Risk Management
Greed is NOT Good!
Solution: Take control!

Not a game of statistics

Simple due diligence

Educate your clients that there is a
Due Diligence Process
CIFP Four Educational Streams: Wealth Management  Tax Planning  Estate Planning  Risk Management
Greed is NOT Good!
6 Questions to Ask to
Ensure Good Corporate
Governance
CIFP Four Educational Streams: Wealth Management  Tax Planning  Estate Planning  Risk Management
Greed is NOT Good!

What is your company’s policy on the
responsibilities you have toward
unitholders?
CIFP Four Educational Streams: Wealth Management  Tax Planning  Estate Planning  Risk Management
Greed is NOT Good!

What is your company’s policy on their
role as representing unitholders with
respect to the voting of shares, and
other shareholder issues?
CIFP Four Educational Streams: Wealth Management  Tax Planning  Estate Planning  Risk Management
Greed is NOT Good!

Do you publicly disclose how your
company has voted their shares in all
holdings? If so, where do I find this
information? If not, Why?
CIFP Four Educational Streams: Wealth Management  Tax Planning  Estate Planning  Risk Management
Greed is NOT Good!

What is your company’s viewpoint
toward executive and management
option plans?
CIFP Four Educational Streams: Wealth Management  Tax Planning  Estate Planning  Risk Management
Greed is NOT Good!

What initiatives is your company
taking to deal with the shareholder
issues we face?
CIFP Four Educational Streams: Wealth Management  Tax Planning  Estate Planning  Risk Management
Greed is NOT Good!

In general, please explain what you
see as the issues facing your
unitholders and shareholders today?
Can you define your policies and
attitudes toward these issues?
CIFP Four Educational Streams: Wealth Management  Tax Planning  Estate Planning  Risk Management
Greed is NOT Good!
“…a man with a briefcase can
steal more money than any
man with a gun …”
- Don Henley
CIFP Four Educational Streams: Wealth Management  Tax Planning  Estate Planning  Risk Management