Michael Woodford: Hedge funds need to pay attention to stories of corporate corruption — Transcript

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1. 0:10yeah I mean hedge funds are looking
2. 0:12inside companies particularly when
3. 0:13they're taking a long position and I
4. 0:16suppose what I can show them is the
5. 0:18workings of a boardroom orbe it in Japan
6. 0:20which has got many unique
7. 0:21characteristics but uh the way people
8. 0:24behave and
9. 0:25interact and a very base lesson that you
10. 0:28know directors are human and full of
11. 0:30failings and I I think to hear that you
12. 0:32know from inside the boardroom is
13. 0:33something which is
14. 0:35enlightening I mean hedge funds you know
15. 0:37with the general public have mixed
16. 0:39reputations you know but uh if you care
17. 0:42about the capital markets and the way
18. 0:43they work um hedge funds are often much
19. 0:46better and more effective than
20. 0:48regulatory authorities and and law
21. 0:49enforcement agencies and getting you
22. 0:51know to the truth of issues and exposing
23. 0:53things which are wrong so um they have a
24. 0:55real value in that in that
25. 0:58sense
26. 1:03I mean when you talk about trust and
27. 1:04honor I'm very cynical of those
28. 1:06qualities and wouldn't look to manage an
29. 1:08investment on on that premise you know
30. 1:10I'd look for the hard side of compliance
31. 1:12and regulation which is you know
32. 1:14Relentless questioning uh forensic
33. 1:17auditing wherever you can do so
34. 1:19independent whistle lines uh blower
35. 1:21lines it's that type of um practical you
36. 1:25know starting point should not be trust
37. 1:28and loyalty and and honor it should be
38. 1:30that people are human and human people
39. 1:32you know will make mistakes and do bad
40. 1:34things so you know it's the opposite to
41. 1:36that in a
42. 1:41sense yeah I I think uh Japan has got
43. 1:46unique problems and you know while prime
44. 1:48minister AB is saying many nice things
45. 1:50you know as we saw with the tashiba
46. 1:51Scandal nothing really has changed in
47. 1:54Japan um I think things are getting
48. 1:56better in many other territories I would
49. 1:58have concerns for the similar reasons to
50. 2:00Japan and China and this type of issue
51. 2:03where um compliance I don't think has
52. 2:06culturally the same meaning I think that
53. 2:09the West is you know finally waking up
54. 2:12and realizing that you know if you don't
55. 2:15manage compliance and governance and
56. 2:17whole boards really to account then
57. 2:20things will go wrong and that's
58. 2:21incredibly damaging and costly so I
59. 2:24think you know mine is a black story but
60. 2:27I think things are getting better and
61. 2:29management are finally learning the
62. 2:36lesson