Free Article Review On Failure Of Corporate Governance Rules In BAM

As reported to the Wall Street Journal, a Sao Paolo based prosecutor Marcelo Camargo Milani has registered civil charges in the Sao Paolo State Court against the Brazilian subsidiary and two high ranking executives of Brookfield Asset Management (BAM), one of the world's largest property investors based in Toronto with assets worth over $10 billion under management, for allegedly committing bribery to acquire construction permits. According to a Brookfield spokesperson, the allegation of bribery is baseless and has been raised by a distraught former employee named Daniela Gonzalez, a former chief financial officer of the Brazilian subsidiary, who was fired in 2010. This sort of allegation could prove to be harmful for the company in raising money for the new funds for Brazil. According to William Atwood, the executive director of Illinois State Board of Investment, this sort of allegation could terminate the possibility of any discussion relative to raising fund until the issue the company is being investigated for is resolved. However, the Brookfield spokesman completely denied of any impact the issue of allegation is likely to make on its fundraising.
Corporate governance rules are a set of guidelines and principles by which a company controls and directs its practice and processes. One of the golden rules of best corporate governance practice involves an ethical basis to the business. Commitment of bribery to win a project is an ethical violation which goes against the principle of running a business morally, ethically and legally. A company should run its business in a fair and transparent way so that there is no scope for such allegation to arise. That such allegation against Brookfield Asset Management has surfaced shows that there are no clear corporate governance rules in place in the company.