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Board Games 2006

Income trust boards: The new 'Wild West'

ELIZABETH CHURCH AND JANET MCFARLAND

From Wednesday's Globe and Mail

Latest comment posted at 3:55 AM EDT 26/10/06

An exclusive investigation by The Globe and Mail's Report on Business of how trusts are run finds few rules and fewer standards ...Read the full article

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  1. Mr Dithers from Canada writes: The 'New Wild West'? Weren't the authors around when Nortel, JDS, Air Canada, Stelco, Enron and countless tech wonders (all non-income trusts I might add) demolished billions in shareholder wealth?
  2. paul greenspoon from St. Catharines Ontario, Canada writes: Retired persons are particularly vulnerable to the trust model. With 250 billion dollars in assets concentrated into the hands of seniors an under regulated trust market is a disaster waiting to happen. Similarly, articles that create panic can be equally disasterous. The time is long overdue for the Canadian government to establish firm guidelines for trusts and to end speculation about taxation and regulations. To do nothind is to court disaster.
  3. Jim Forden from Okotoks, Canada writes: It's about time some one blew the whistle on the Trust. I asked the Ontario Securities Commission about this problem a long time ago and received the typical bureaucratic brush-off. It is going to take a lot of whistling by a lot of people and organizations to get anything done - the regulators are one big rock to get rolling - all of it up hill.
  4. Rick Drysdale from Sidney B.C., Canada writes: This article is very misleading. The range of trusts makes a one size fits all pattern for governance unworkable. They also work under gap principals as far as their accounting is concerned for the most part just like any other company in Canada. There must be room for the different characteristics of the company. Also what is wrong with having and external management team?
    This article seems to take the view that investors are idiots and need to be protected from the big bad guys as can be seen in the title of the article.
    I think its time that the media moved on to the next thing they need to protect us from.
  5. Rick Drysdale from Sidney B.C., Canada writes: And another thing. If things are so bad why are the members of this organisation investing in them? I feel they would like nothing better than to scare the retail investor out of the market. Again it gets down to the pros thinking they know what is best for us.
    Time and time again it is being shown that we can get along just fine without them and their high costs and other nonsense.
    The retail investor today is light years ahead of the investor of 20 or even 10 years ago.
    I get so tired of their paternalistic attitude when I know it is only their self interest at work here.
    God am I ever getting cynical.
  6. Allan Gallant from Halifax, Canada writes: well done and interesting
  7. rob coomber from Powell River B.C, writes: At this point in my investment life I find trusts just what the
    doctor ordered. What is there not to like about monthly
    income paid out in very generous amounts. I love the
    idea of augmenting my pension with trust money.
    I have no problem with the loose style in which trusts are
    run. How many times have you received in the mail proxy
    info about the election of certain board members. Most of
    us don't give too much of a care as to who is running a
    firm, so long as they are good solid companies with solid
    earnings. It is our job to do due diligence when it comes
    to picking the trusts we plan on investing in. My biggest
    concern is the advent of huge companies like telus or bell
    morphing into trusts, and forcing the government to make
    the whole process less attractive, and killing the Goose
    that layed the golden egg. I think in a lot of ways it would
    be prudent for investors to try to avoid trusts as a vehicle
    for RRSPS. The tax advantages are very good in non registed
    accounts, and give the government less ot bitch about over
    lost tax revinue. A billion or so is a drop in the bucket,
    especially when you consider the fact that the folks who
    rely on trusts are in the business of looking after their needs
    in their retirement years. That is head and shoulders ahead
    of having to rely on the social systems to run public pensions
    at huge cost to our citizens.

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