A new videocast on China and its global companies. The purpose is to engage executives on applying a transaction costs economics and a Kantian corporate governance framework to the strategic task of building global Chinese brands. The interest stems from consultancy work in advising clients on how best to enter a new market-as-a-game by adopting strategic lateral thinking based on the GEMS Tn=3 Framework.

Competitor reactions to entry? Where are the likely market inefficiencies in going global? Will Chinese companies rely on external private equity to grow internationally? if so, what are the likely governance issues to arise? And where are the trade-offs? Is it volume against margin? Is it rapid expansiion against debt? Is it growth against dividends? Going global is a long game wherein the waiting gains exceed the costs of an early move.

Patrick addresses an invited audience at the Garden Hotel, Guangzhou, 12noon
September 28 2010  to discuss in a luncheon address the role of China in the world economy.

Registration available with Ms Christina Siu on Facebook or MBSAAC Annual Dinner 2010 Registration Form.

• Download the PowerPoint Presentation
• Download the article: Let China revalue RMB unilaterally

To see Patrick McNutt’s Thomson Reuters videos, please go to

http://insider.thomsonreuters.com [Enter your Insider password and search 'patrick mcnutt']

The videos are also in a public domain called  http://wn.com/currency_speculation [Search 'patrick mcnutt']

CEO Breakfast Talk with SPRING Singapore

Addressing senior executives at a SPRING Breakfast meeting in Singapore recently, Patrick discussed leadership in the twenty-first century, comparing leadership style (manager) and leadership type (leader), arguing that leadership in business is a quality that differs from business leadership, and that type as a signal can impact on financial performance.

Download the Leadership Presentation.

Patrick delivered plenary address an international stock market brokerage private event at Fairmont Nile Plaza hotel in Cairo, 22 February 2010, organised by TREND and Tradenet KN Technologies LLC. In a wide ranging discussion, he identifed a paradigm shift in economcs, advised on creative industry opportunities for PE and outlined his prognosis for FDI in MENA and EMs economies.

Download the Presentation file (PowerPoint Slideshow).

Shanghai Interview

One-bank Model

The Ethical Maturity Index provides an assessment of your company’s compliance with good governance criteria on a scale of 1 to 4. A mature company scores 4 with a  Code of Ethical Practice. Where does your company score? How to achieve that top score is part of a new risk management tool developed and tested on clients by Elena Demidenko and myself.

The following article has been published on July 8 2009.

Exchange rates can exacerbate crisis

From Prof Patrick McNutt.

Sir, Commentary on the financial crisis seldom addresses the significance of exchange rate volatility. That may change soon. Both the World Trade Organisation and the World Bank have warned about the rise in protectionism. China believes that currency issues should be discussed at the Group of Eight meeting this week in Italy.

The question therefore has to be asked: should the issue of exchange rate volatility be part of a co-ordinated solution to our world financial crisis?

The answer is in the affirmative. Big holders of US dollar reserves, such as China, may be rethinking the dollar’s role as a reserve currency. It is a signal of a rethink on currency alignments at a time when world leaders are more focused on fiscal stimulus, regulatory reform and socialising banks’ losses.

As the value of US dollar reserves fluctuate, and trading nations adopt protectionist policies, big holders of dollar reserves may switch to (say) the euro in a signalling game of tit-for-tat policies, and if that were to continue over the next year the dollar’s role as the world’s main reserve currency unit could be compromised.

There is a solution. A managed exchange rate regime, for two to three years, negotiated with agreed rate bands and appropriate escape clauses for governments reliant on fiscal and monetary policy, would be a key signal from world leaders at their meeting in Italy and would help to arrest a nascent uncertainty in this financial crisis.

This is not a call for a fixed exchange rate regime per se; it is a call to recognise that while exchange rate volatility may not have contributed to the financial crisis, it may have the potential now to exacerbate the crisis.

World leaders are emerging as players in a non-cooperative signalling game on currency issues, a game that began at the G20 in April.

Unless currency issues are addressed at the G8 meetings in Italy, “currency signals” will undermine world economic recovery.

Patrick McNutt,
Visiting Fellow,
Manchester Business School, UK

http://www.ft.com/cms/s/0/bb726952-6b57-11de-861d-00144feabdc0.html

Copyright The Financial Times Limited 2009

In addressing Manchester Business School Alumni associations in Dubai and Singapore, Patrick McNutt argues that the world economy is now enduring a signalling cycle that probably began in the US on March 12th 2007 and it will continue to oscillate until either a market equilibrium (= continued recession) or a

• Signalling (pdf)
• Signalling 2009 (pdf)

This is a short paper due for publication in 2010. The views are personal. The paper outlines the background to Demidenko and McNutt’s new consultancy tool (available on this web page] for assessing a company’s ethical maturity in terms of ERM and improving the governance gap.

• Ethics of Enterprise Risk Management (pdf)

Nationalised banking structures destroy shareholder value and incur long terms costs for the taxpayers.

• BigBankParadox (pdf)
• BigBankParadox_powerpoint (ppt)
• Drivetime_on_RTE_