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FROM BYRSA TO MODERN STOCK EXCHANGES BYRSA: PHOENICIAN TRADING EXCHANGE IN CARTHAGE

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FROM BYRSA TO MODERN STOCK EXCHANGES BYRSA: PHOENICIAN TRADING EXCHANGE IN CARTHAGE

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  1. EUROPEAN PENSIONS SUMMITIMN Conference - Amsterdam, October 15, 2007CORPORATE GOVERNANCEFINANCIAL OVERVIEWbyAndré BaladiCo-Founder: International Corporate Governance Network (ICGN)Member: Advisory Committee of the U.N. Intergovernmental Working Group of Experts on International Standards of Accounting & Reporting (ISAR)

  2. SYLLABUSSTOCK EXCHANGE MERGERSGOVERNANCE MONITORING & RATING AGENCIESOECD & ICGN CORPORATE GOVERNANCE CODES THE SOCIAL & ENVIRONMENTAL CONUNDRUM - 2 -

  3. FROM BYRSA TO MODERN STOCK EXCHANGESBYRSA: PHOENICIAN TRADING EXCHANGE IN CARTHAGE The current denominations - e.g. Bourse, Borsa, Bolsa - derive from the Carthagenian Byrsa 700 B.C.AMSTERDAM + LONDON STOCK EXCHANGES 1600 A.D.PARIS STOCK EXCHANGE 1709 A.D.NEW YORK STOCK EXCHANGE 1792 A.D.GENEVA STOCK EXCHANGE 1855 A.D. TOKYO STOCK EXCHANGE 1878 A.D. CAIRO - ALEXANDRIA STOCK EXCHANGE 1903 A.D.(fifth in the world before the second World War) - 3 -

  4. CAPITALIZATION OF MAIN STOCK EXCHANGES US$ BILLION * NYSE Euronext 20.1 Deutsche Börse 25.5 LSE (London) 7.3 BME (Madrid) 4.9 NASDAQ 4.0 * Source: Reuters, September 24, 2007 - 4 -

  5. STOCK EXCHANGE CAPITALIZATION OF LISTED COMPANIESUS$ 1'000 BILLION * NYSE Euronext 20.5 TSE (Tokyo) 4.7 NASDAQ 4.1 LSE (London) 3.9 Deutsche Börse 1.9 BME (Madrid) 1.5 SWX (Zurich) 1.3 Borsa Italiana 1.1 KRX (Seoul) 1.2 Etc.* Source: World Federation of Exchanges, July 31, 2007 - 5 -

  6. NYSE-EURONEXT: A UNIQUE COMBINATION Premier global listing venue with a combined capitalization of listed companies exceeding US$ 20 trillion. Balanced corporate governance model between the U.S. and Europe. Each exchange keeps its regulatory environment. Listings in two currencies: US$ and €.- 6 -

  7. OTHER STOCK EXCHANGE ALLIANCESBorsa Italiana is joining the LSE.Alliance of NASDAQ + LSE + OMX + Borse DubaiWhat will the Qatar Investment Authority do ?Borse Dubai holds a minority stake in NYSE Euronext Would TSE ultimately join NYSE Euronext ? Quo vadis Brazil, Russia, India, China (BRIC) ? What could be the impact of the International Securities Exchange (ISE) acquisition by Deutsche Börse + SWX ? - 7 -

  8. NEW STOCK TRADING PLATFORM EC NOV. 1, 2007 MiFID TURQUOISE GROUP (Markets in Financial Instruments Directive) CitigroupCredit SuisseDeutsche BankGoldman SachsMorgan StanleyUBS - 8 -

  9. NYSE EURONEXT REACTION TO TURQUOISE GROUP Euronext would authorize banks to trade on its order book and IT infrastructure.NYSE, already favored by lowest worldwide trading costs (17.50 p.b. vs. 46.85 for LSE), might develop real-time stock prices with Google, GE, and / or Yahoo. - 9 -

  10. MAJOR GOVERNANCE DISASTERSAHOLDENRONPARMALATTYCOVIVENDIWORLDCOMETC - 10 -

  11. GOVERNANCE MONITORING ORGANIZATIONS - Council of Institutional Investors (CII), Washington DC - International Corporate Governance Network (ICGN), London - Organisation for Economic Cooperation & Development (OECD), Paris- Public Company Accounting Oversight Board (PCAOB), Washington DC- UNCTAD Intergovernmental Working Group of Experts on International Standards of Accounting & Reporting (ISAR), Geneva- World Bank - Global Corporate Governance Forum, Washington DC - 11 -

  12. GOVERNANCE RATING AGENCIES Corporate Library ECGS: DSW, Ethos, PIRC, Proxinvest . . . Egan Jones FTSE-ISS Corporate Governance Index Governance Metrics International (GMI) RiskMetrics + ISS + IRRC + Deminor Moody's and Standard & Poor's Proxy Governance + Manifest + Marco Consulting Vigeo: + Ethibel + Stock at Stake + AvanziXinhua Finance + Glass Lewis- 12 -

  13. OECD GOVERNANCE CODE - Basis for an effective corporate governance framework- Rights of shareholders and key ownership factors- Equitable treatment of shareholders- Role of stakeholders in corporate governance- Disclosure and transparency - Responsibilities of the Board - 13 -

  14. ICGN GOVERNANCE CODE 1. Corporate Objective2. Disclosure & Transparency 3. Voting Rights 4. Corporate Boards 5. Corporate Remunerations 6. Corporate Citizenship 7. Corporate Governance Implementation8. Audit - 14 -

  15. DISCLOSURE & TRANSPARENCY - Corporations should disclose relevant material information on a timely basis. - Corporations should disclose their systems of governance and whether it complies with a governance code. - 15 -

  16. VOTING RIGHTS Upholding the "One Share - One Vote" principlethroughout the European Continent and AsiaNestlé's 3% voting rights cap survey among its shareholders. Despite its 6% cap, Danone is reported to solicit state protectionism vs. Pepsico's alleged takeover attempt. - 16 -

  17. CORPORATE BOARDS- Splitting Chair and CEO functions - Majority of independent Directors - No reciprocal cross-appointment of Directors- 17 -

  18. EXECUTIVE REMUNERATIONSAvoiding guaranteed high remunerations Aligning the financial interests of managers with those of shareholders At Hewlett Packard, Carly Fiorina got a US$ 44 million severance + retirement package. At Morgan Stanley, Phil Purcell got US$ 150 million, but John Mack gave up US$ 25 million guaranteed per annum. - 18 -

  19. AUDIT - External auditors should be proposed by the Audit Committee of the Board, for approval by shareholders. - Non-audit fees should be approved by the Audit Committee and disclosed in the Annual Report. - Toward the development of a single global accounting standard. - 19 -

  20. CORPORATE CITIZENSHIPExamples of codes to which companies can adhere: - OECD Anti-Bribery Code - Social Accountability SA 8000 - Environmental Certification ISO 14'000 - U.N. Global Compact on Responsible Investments - 20 -

  21. CORPORATE GOVERNANCE IMPLEMENTATION - Corporate governance issues should preferably be addressed through dialogue, negotiation, mediation or arbitration. - Shareholders should have the right to sponsor resolutions or convene extraordinary meetings. - 21 -

  22. THE SOCIAL & ENVIRONMENTAL CONUNDRUM Al Gore's global warming campaigns Norwegian insurer Storebrand screens its investments with 200 sustainable corporate investment ratios Corporations are implementing adequate work practices more rapidly than environmental practices According, among others, to London Business School Professor Harry Korine, social & environmental ratios don't impact stock valuations- 22 -

  23. ECO-EFFICIENCY INDICATORS - Water Use - Energy Use - Global Warming Contribution - Ozone Depleting Substances - Waste www.unctad.org/isar - 23 -

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