PwC says emerging markets to drive revenue growth [Reuters]
Dennis Nally, chairman of PwC International, said Africa was a key part of the group's strategy and it had overhauled its governance structure by consolidating its 17-member firms on the continent as opposed to operating as individual legal entities. PwC was expanding in Africa to meet demand for services from large multinational clients growing into the region to offset slowing growth in their home markets, he said. These plans could easily see Africa's contribution to its revenue double over the next five years from $575 million in 2011, the company said. "We expect that by the year 2016, about 30 percent of our revenues globally will come from developing markets ... including Nigeria and that is a very significant shift," Nally told reporters during a visit to Lagos. "Our business mirrors what's going on with our clients. So the shift that our clients are experiencing from the developed markets to the developing markets, we see that."
Microsoft's $6.2B accounting charge could saddle it with 1st quarterly loss as public company [AP]
Microsoft may be reporting its first quarterly loss as a public company because of a flopped purchase of an online ad company. The software maker will release its latest quarterly results after the market closes on Thursday. The fiscal fourth-quarter numbers will include a $6.2 billion charge to reflect that Microsoft's 2007 acquisition of aQuantive hasn't yielded the returns envisioned by management. Microsoft Corp. paid $6.3 billion for aQuantive as part of its effort to lure Internet advertisers away from Google Inc. But since the deal closed, Google has expanded its share of the online ad market while Microsoft's online division has suffered billions of dollars in losses. The non-cash charge is so large that it could wipe out Microsoft's earnings from April through June. Analysts polled by FactSet had predicted Microsoft would earn about $5.3 billion in the three-month span. That doesn't reflect the aQuantive charge. Microsoft didn't spell out how its quarterly results would be affected when it announced the charge on July 2.
The genius of the corporate structure is the checks and balances that are supposed to make sure the interests of the providers of capital and the managers who spend it are aligned. The responsibility for that alignment is so important that the legal system imposes the highest level of care and loyalty, the fiduciary standard, on boards. That means directors must act for the benefit of shareholders, setting aside their personal interests. It doesn’t mean much if shareholders can’t replace directors who fail to meet the standard. Edward Jay Epstein, an investigative journalist, has said that director elections are “procedurally more akin to elections held by the Communist party of North Korea than those held in Western democracies.”