Power of Facebook

- relevant to P1 Governance, Risks & Ethics























Power of Internet - Facebook that challenged powerful leaders (From Left to right)
Pic 01 : Libya's Leader Gaddafi facing uprising social unrest
Pic 02 : Egypt's leader Mubarak forced to resign after military powers backed the people's protest
Pic 03 : Phillipines late-Leader Ferdinand forced to flee to USA after people's march to his palace.


Perfect flow of information promotes market efficiency. Empowers users, customers and society to choose, vote and purchase goods and services. By extension, it applies to choosing large entities such as government.

In Phillipines, more than 1 million citizens poured on the streets to demand the resignation of the then corrupt dictator Ferdinand Marcos. Networked through SMS amongst people. Ferdinand stole over US$20billion and stashed away in Swiss Bank account. Years after his death, only then did the Swiss bank reluctantly refunded the ill gotten gains to the poor country.

Today we are witnessing the uprising of Egypt and result in the overthrow of its dictator President Mubarak of 30 years. The political contagion is spreading to Tunisia, Libya and the oil-rich kingdom, Saudi Arabia. Threatening the stability of entire Middle East.

These events prove that Information Technology has changed modern history. More than ever before, helpless and powerless individuals can now vote, collude or (unfortunately) violently protest against establishments.

By the same extension, this applies to Corporate Governance. If Board of Directors allow CEO act as dictator, sooner or later institutional investors and "little" people-investors will revolt. Unfortunately, to set up EGM is costly affair with associated free rider problems.

Myners, 2004 (UK) Report has strongly advocated :

(a) Beneficial owners
Beneficial share owners should ensure that their agreements with investment managers and custodians who are accountable to them should include voting standards, establish a chain of responsibility and an information flow on voting and require reports by investment managers on how they have discharged their responsibilities. Investment managers should decide a voting policy and stick to it.
(b) Electronic voting
The report recommends the adoption of electronic voting to enhance the efficiency of the voting process and to reduce the loss of proxy votes.
(c) Stock lending
The report comes down against stock lending on the grounds that voting rights are effectively transferred, and lending sometimes takes place specifically to transfer voting rights. Myners recommends that stock should be recalled if there are votes on contentious issues.
(d) Investment managers
Investment managers should report to their clients how they have exercised their voting responsibilities.


Note Point (b) above on electronic voting. Yes, governance efficiency can be greatly promoted and corruption minimised with greater shareholders' activitism. Enron, Worldcom, Parmalat and BCCI scandals are a thing much avoidable. Shareholders can vote very cheaply at convenience overcoming geographic barriers and practical difficulties of attending AGM/EGM

Not fool proof, I am afraid! Such measures against much trickier albeit crookish governance structure like Adelphia Corp. and even Google Corp, mentioned in my Lectures. The same is said on Japanese Multi-tier Board Structure and 'keiretsu' cross-shareholding and poor governance structure.

But its a start of new revolution that will improve governance.

Thank you, Mark Zuckerberg of Facebook and contemporaries.


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WISHING ALL ACCA CANDIDATES THE BEST OUTCOME FOR THEIR EXAM RESULTS.

PREPARE FOR A BETTER TOMORROW BY WORKING HARD TODAY.









NEVER SAY GIVE UP, I SAY, ONCE AGAIN, "NEVER GIVE UP!" (Winston Churchill, 1935, UK Prime Minister/LEADER during World War II)

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Power of Facebook

WASHINGTON — Secretary of State Hillary Clinton Sunday highlighted the need for the US government to use Twitter and other social media to connect with young people amid turbulent change in the Middle East and North Africa.

Following revolutions in Tunisia and Egypt fueled by Facebook, Twitter and YouTube exchanges, the US State Department set up Twitter accounts last week in Farsi, Arabic and other languages to get its message across.

"What we expect to do is to be communicating through the new social media with literally millions of people around the world because we want them to hear directly from us what our policies are," Clinton said.

"We want to use it to rebut some of the falsehoods and accusations that unfortunately are made against the United States," she said in an interview with ABC's "This Week" conducted Friday but broadcast Sunday.

"But mostly we want to be in the mix with this incredible young, energetic population that is seeking the same rights to express themselves as young people in the United States seek."

In its first Twitter feeds in the Iranian language Farsi on February 13, the State Department accused Iran of hypocrisy by supporting the revolt in Egypt but seeking to prevent anti-government demonstrations in Iran.

International and local Iranian media were banned from freely covering the massive wave of protest sparked by the disputed re-election in June 2009 of President Mahmoud Ahmadinejad.

But Iranians overcame the reporting ban by using social-networking and image-sharing websites such as Twitter, Facebook, YouTube and Flickr despite efforts by local officials to cut off mobile phones and the Internet.

Clinton, making her second major speech on Internet freedom in the past year on Tuesday, announced that the State Department would also begin sending messages in Chinese, Russian and Hindi.

In her address, Clinton singled out China, Cuba, Iran, Myanmar, Syria and Vietnam as countries which practice censorship or restrict access to the Internet.

She noted that Syria had lifted a ban on Facebook and YouTube last week but convicted a teenage girl of espionage on Monday and sentenced her to five years in prison for political poetry she wrote on her blog.

Clinton described the Internet as "the public space of the 21st century -- the world's town square, classroom, marketplace, coffee house, and nightclub."

She said protests in Egypt and Iran fueled by Facebook, Twitter and YouTube reflected "the power of connection technologies as an accelerant of political, social, and economic change."

Source:

Clinton, 2011, Twitter helps US tap into youth unrest, http://www.google.com/hostednews/afp/article/ALeqM5ieEkbcVZS19bthkKulCADv3xIRfA?docId=CNG.24d946fd7520b4d46888e004720be99f.9a1, 21 February