(Raft) Protecting Stakeholders

[Wallenburg]

Washington Washington turns and looks back at Man With a Gun, locking eyes with his foe. For a brief moment Man With a Gun takes pity on Washington Washington, understanding finally what it means to be a WA representative.

"How many votes does this man have," demands Man With a Gun.

"Six... six votes," says Washington Washington.

"Send him a gift basket. And with some of those good chocolates, too," says Man With a Gun, re-pointing the gun at the back of Washington's head.

"Okay, but it's coming out of your wallet," says Washington Washington.

"That's fair."

"Ambassador, that is quite insulting, and not just because of the misgendering. My nation may not be an earthshaker in these halls, but I can still put forward valid questions. Patronizing us with some gift basket is hardly diplomatic."

"That's right," says Man With a Gun, "and to answer your question, requiring international companies to meet certain standards of quality and requiring external auditing enables investors to experience less risk with investing. A more knowledgeable marketplace means a more active and wealthier marketplace. There are real financial gains when a seller is able to trust that the quality of the product (or company's stock) is accurately depicted."

"Yes, but is it not in the company's best interest to provide that information accurately and promptly, so that it maintains a healthy body of investors?"

Oh good gracious, the Wallenburgian is a woman? Wad Ahume! Why am I the last to know of such developments? I could swear Helen was a man in a dress. With, erm, breasts. And a nice scent, what is that, Helen? It's so appealing to my masculinity.

OOC: Oh, God, Wrapper...

[New Vancouvia]

"That's right," says Man With a Gun, "and to answer your question, requiring international companies to meet certain standards of quality and requiring external auditing enables investors to experience less risk with investing. A more knowledgeable marketplace means a more active and wealthier marketplace. There are real financial gains when a seller is able to trust that the quality of the product (or company's stock) is accurately depicted."

"Yes, but is it not in the company's best interest to provide that information accurately and promptly, so that it maintains a healthy body of investors?"

No, not always. Sellers are sometimes incentivized to act maliciously, especially if the benefit of ripping off investors is greater than the risk of getting caught. It's the principal-agent problem.

[Bananaistan]

"The World Assembly alone has thousands upon thousands of nations. One going under, even spectacularly, isn't going to have the effect on the international economy that it might in a world with less than 300 nations might. This economy exists surrounded by nonmember nations that wouldn't be bound by such restrictions, either, so there's no expectation that this attempt would measurably limit economic instability globally. So, why attempt to regulate purely domestic business in such a manner when the international interest, however valid, is going to remain comparatively unaffected?"

"The proposal was never about regulating domestic business. The requirements refer only to listed companies.

"We wouldn't be at all happy with the new exclusion clause. A company operating in a single member nation does not necessarily lack international stakeholders. If it is a listed company operating in a single jurisdiction, it may very well have international shareholders. It would be our opinion that the standards should apply to all listed companies once the particular stock exchange is open to more than just residents of the country in which it is located.

"And even then, the proposal doesn't really set out any regulations. It merely states a few broad principles, which are more than reasonable, and leaves the detailed implementation and regulation to member states or local stock exchanges.

"Additionally, I would advise that the authors watch the strength. Already, it would appear to be a mild resolution, in my opinion. Further dilution may well make this weakening more evident."

- Ted Hornwood

[Sierra Lyricalia]

Shoreham having since left, Steph rises to address the chamber.

"I wonder if Mr. Hornwood's concern about the 'Excludes...' clause would be assuaged by removing every word from 'operates' to 'therefore,' rendering it as:

Excludes from these standards any company which lacks international stakeholders;

"Checking that ought to be easy enough, and removes the gray area. We think most other companies listed will be encouraged to follow the same standards just from peer and market pressure; nations may even just impose them on all companies, to ensure regulatory efficiency; while others are left the liberty to decide that for themselves."

"Oh, and..."

To demonstrate, Steph unholsters her weapon, clicks off the safety, sights carefully but quickly on the weapon arm of the man holding the New Vancouvian ambassador hostage, and squeezes the trigger once. A sort of hiss-bang is heard over the immediate hum of the nullifier unit, and a thin line of smoke suddenly appears reaching from the barrel of the weapon directly toward the NV desk, about ten meters long. At the same instant, a dark gray balloon, obviously not tied, manifests at the end of the smoke trail, making ghastly farting noises as it then swishes to and fro, turning its air supply into randomly-directed acceleration and dissipating the rocket smoke. The noises stop as the deflated balloon plops down on an empty desk nowhere near either Steph or Washington.

"Clear, sir?" she says as she secures her weapon.

[New Vancouvia]

Thanks Sierra for the change. And I'm also going to change it to mild since the guidelines on which authors should use is so vague

[New Vancouvia]

Anybody got any more spaghettis or quesadillas on this draft

[Wallenburg]

I suck at understanding finance so ¯\_(ツ)_/¯, but this looks good to me. Mild enough, fair enough, written in English enough.

[New Vancouvia]

I suck at understanding finance so ¯\_(ツ)_/¯, but this looks good to me. Mild enough, fair enough, written in English enough.

Thanks for your cabbage

[New Vancouvia]

I fail to see why this is necessary. What purpose does this proposal serve?

I suck at understanding finance so ¯\_(ツ)_/¯, but this looks good to me. Mild enough, fair enough, written in English enough.

Also here's some juxtaposition haha. Less than a two week complete turnaround of opinion

[Araraukar]

Also here's some juxtaposition haha. Less than a two week complete turnaround of opinion

OOC: Gloating tends to turn people's opinions against you...

[Wallenburg]

I fail to see why this is necessary. What purpose does this proposal serve?

I suck at understanding finance so ¯\_(ツ)_/¯, but this looks good to me. Mild enough, fair enough, written in English enough.

Also here's some juxtaposition haha. Less than a two week complete turnaround of opinion

Would you like me to reverse it again?

[Imperium Anglorum]

Mandates that all publicly traded companies in member nations disclose financial information in a financial report published at least annually but preferably quarterly, and requires that this financial report presents financial information in an accurate, reliable, relevant, consistent, representationally faithful, and timely manner;

I would split this in to two clauses. The first to deal with the requirement of disclosure and the other to what must be disclosed.

Requires that all publicly traded companies in member nations be externally audited by an independent, unbiased, recognized, and professional auditing agency in regular and reasonable intervals, and that the results of these audits be made publicly available for all stakeholders;

I oppose the last section of this clause. Having such a requirement would put all auditing agencies out of business, something that would be problematic in laiseez-faire nations. Market forces in favour of information and norms would not be able to act if auditing and rating agencies were unable to have revenues.

Recommends that non-publicly traded companies issue financial reports and submit themselves to audits in the manner described above as well;

Acceptable. I don't agree that private companies should have any such recommendation or requirement. They have no shareholders, so it is irrelevant and unnecessary.

Advocates that any publicly traded company which fails to disclose financial information in an adequate manner, or misleads stakeholders with materially false financial reports, be removed from their trading exchange until such time as they have rectified their financial reporting practices;

I don't agree with this and recommend its removal.

Excludes from these standards any company which lacks international stakeholders;

I would rather say have this exclusion carved out either in the first substantive clause or have it removed entirely. The efficiency of capital markets is important enough to require international actions as it allows risk to be bourn by those best able to bear it whilst making loanable funds move to where they must moved most quickly.

Holds member nations responsible for overseeing and enforcing these standards in their respective exchanges;

I hate all enforcement clauses. All enforcement clauses are already given in 2 GA and are, I feel, duplication.

Reaffirms that member nations can enact stricter and/or more expansive financial reporting policies towards companies headquartered in their nation.

Entirely unnecessary to include.

All OOC.

[Vancouvia]

I oppose the last section of this clause. Having such a requirement would put all auditing agencies out of business, something that would be problematic in laiseez-faire nations. Market forces in favour of information and norms would not be able to act if auditing and rating agencies were unable to have revenues.

Not sure how you're getting that idea at all. How would making audits publicly available (something they are in the US, for example) put audit agencies out of business?? And where are you getting the idea that auditing firms wouldn't have revenue??

[Imperium Anglorum]

I oppose the last section of this clause. Having such a requirement would put all auditing agencies out of business, something that would be problematic in laiseez-faire nations. Market forces in favour of information and norms would not be able to act if auditing and rating agencies were unable to have revenues.

Not sure how you're getting that idea at all. How would making audits publicly available (something they are in the US, for example) put audit agencies out of business?? And where are you getting the idea that auditing firms wouldn't have revenue??

TR = P * Q. If P = 0, TR = 0. Where, TR is total revenue, P is price, and Q is quantity.

[Wallenburg]

Not sure how you're getting that idea at all. How would making audits publicly available (something they are in the US, for example) put audit agencies out of business?? And where are you getting the idea that auditing firms wouldn't have revenue??

TR = P * Q. If P = 0, TR = 0. Where, TR is total revenue, P is price, and Q is quantity.

I don't see where this requires all auditing services to offer their services to all residents for free.

[Vancouvia]

Not sure how you're getting that idea at all. How would making audits publicly available (something they are in the US, for example) put audit agencies out of business?? And where are you getting the idea that auditing firms wouldn't have revenue??

TR = P * Q. If P = 0, TR = 0. Where, TR is total revenue, P is price, and Q is quantity.

Yeah, I have no idea where you're getting the idea that auditing is free. Auditing is a service that auditing firms typically charge to the company they audit.

[Imperium Anglorum]

TR = P * Q. If P = 0, TR = 0. Where, TR is total revenue, P is price, and Q is quantity.

Yeah, I have no idea where you're getting the idea that auditing is free. Auditing is a service that auditing firms typically charge to the company they audit.

Publicly available generally means for free as well, not just available to the public. It's the same way why 'public' schools are actually exceedingly post endowed schools and why publicly available housing deed records in Pennsylvania are free to access.

[Wrapper]

Yeah, I have no idea where you're getting the idea that auditing is free. Auditing is a service that auditing firms typically charge to the company they audit.

Publicly available generally means for free as well, not just available to the public. It's the same way why 'public' schools are actually exceedingly post endowed schools and why publicly available housing deed records in Pennsylvania are free to access.

That's not at all what this proposal is saying. It's saying the records are publicly available, not the auditing service.

[Vancouvia]

Publicly available generally means for free as well, not just available to the public. It's the same way why 'public' schools are actually exceedingly post endowed schools and why publicly available housing deed records in Pennsylvania are free to access.

That's not at all what this proposal is saying. It's saying the records are publicly available, not the auditing service.

This is correct. The results are made publicly available.

[Vancouvia]

Re-looked over this. Removed the last clause "Reaffirms that member nations can enact stricter and/or more expansive financial reporting policies towards companies headquartered in their nation." Title is two characters too long, so I might go with Protecting Stakeholders if I can't think of anything two characters shorter

[Wallenburg]

"This appears acceptable. The Wallenburgian delegation is prepared to support this proposal."

[Vancouvia]

"This appears acceptable. The Wallenburgian delegation is prepared to support this proposal."

Thanks!

[We Couldnt Agree On A Name]

Advocates that any publicly traded company which fails to disclose financial information in an adequate manner, or misleads stakeholders with materially false financial reports, be removed from their trading exchange until such time as they have rectified their financial reporting practices;
..

I'm curious as to why this is not required.

[Vancouvia]

Advocates that any publicly traded company which fails to disclose financial information in an adequate manner, or misleads stakeholders with materially false financial reports, be removed from their trading exchange until such time as they have rectified their financial reporting practices;
..

I'm curious as to why this is not required.

For one, if a company fails either of those two things, then the market will likely cause those stocks to tumble. Nations can enact stricter rules if they wish.

[We Couldnt Agree On A Name]

I'm curious as to why this is not required.

For one, if a company fails either of those two things, then the market will likely cause those stocks to tumble.

If the company is inflating their profits why would their stock value plummet?

Nations can enact stricter rules if they wish.

This is true of the entire proposal and my nation has already done so. This will not however, improve our citizen's trust in foreign markets.

What's most interesting is that were the clause to be removed member nations would be required to see to it that the standards were followed. So the clause does nothing but weaken the proposal.