Greed is NOT Good GREED IS NOT GOOD

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” (Mc. Graw-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” (Mc. Graw-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” (Mc. Graw-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” (Mc. Graw-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” (Mc. Graw-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” (Mc. Graw-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 § Fund. SERV 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