I’m not sure if the words ‘good corporate governance’ exist in the Russian language. But I was slightly bemused to read that John Mack, the former CEO of Morgan Stanley, had been appointed, in June, to the board of Rosneft, the Russian oil and gas company. The state owns some 70% of Rosneft. This strikes me as an odd job for a former red-blooded baron of Wall Street capitalism. Meanwhile Mack was also named to the board of Glencore Xstrata in June.
I am keeping my fingers crossed that Mack’s appointment ushers in better times for this major commodity producer. Nevertheless, I will take a small bow because when Glencore went public in May 2011, I warned readers to avoid the deal: ‘Can this be the right time to buy Glencore shares? When these guys are selling, do you want to be buying?’ The Glencore deal priced at £5.30. The shares closed at £2.72 in the last week of July, delivering a 49% loss to any investor who purchased stock in the IPO.
In fact, looking back, the Glencore initial public offering probably marked the high-water point of the recent commodity boom.