Cover of MoneyWeek magazine issue no 762, 2 October 2015

How to avoid the next wreck

1 October 2015 / Issue 762

Andrew McNally explains why so many big companies are doomed to extinction – and John Stepek reveals the four safeguards against corporate scandals. Read this week's cover story here.

• Revive popular capitalism – sell Channel 4
• The aid industry is holding Africa back
• Will PigGate harm Cameron?

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Podcast – what VW and the aid industry have in common

This week, Merryn and John discuss skewed incentives – why we can expect more scandals like VW, why the aid industry is holding back Africa, and why big companies aren’t as safe as investors think. They also talk about gin.

Click on the image to the left to listen, or right click here to download the MP3 file.

The MoneyWeek manifesto

Merryn Somerset WebbEDITOR'S LETTER

Merryn Somerset Webb

Here at MoneyWeek, we are all for money: earning lots of it; making lots of it via our investments; and building the ability to spend lots of it. We love money. But we also know how it skews behaviour.

Would VW bosses have allowed cheating on emissions tests if it made no difference to their incomes? Would Glencore executives have borrowed their way to disaster, or US CEOs indulged in endless buybacks to force share prices to bubble levels, if pumping up shares wasn’t going to make them rich? We doubt it.

And what of dividends? Dividend cover (which measures the ability to actually pay the dividend) is at a 20-year low in the UK. Boards have bumped up payouts to keep share prices up – but they might not be able to maintain these levels for much longer.

We’ve had enough of all this manipulation at MoneyWeek. We’re investors too, and we want the firms we own to be run in our interests, not in the interests of their corporate executives.

So we are putting together a MoneyWeek manifesto – a list of changes we want and are going to keep pushing for. John has outlined the first four things in this issue. Watch this space for the rest.

• Read the full editor’s letter here: The MoneyWeek manifesto