What happens when CEOs have too much power www.cnn.com

In recent weeks, we've seen how concentrated power and a lack of diverse perspectives on corporate boards can cause systemic blind spots in organizations and lead them into avoidable crises.
Facebook, for instance, is currently in the crosshairs of regulators, business partners and users after damning reports came to light about its reaction to a drumbeat of bad news. Carlos Ghosn's devastating fall from the upper echelons at Nissan has thrown both the auto maker and its longtime partner Renault into crisis, and has cast doubts on the structure of corporate governance in Japan. And his behavior as an "imperial CEO" led to Jeff Immelt parting ways with GE, heralding a corporate meltdown of epic proportions. These are just some of the most recent and visible examples of how power — particularly absolute power with few checks and balances — can presage a crisis.
Here's how absolute power can lead a company down a self-destructive path:
Shrinks cognitive bandwidth

Practices such as having the same person serve as chairman and CEO, failing to give decision making power to truly independent directors, and selecting directors from the same tired pool of contenders, are all likely to increase the chances that corporate leadership will miss something important in the external environment. By definition, the number of perspectives weighing in on decisions are reduced if the diversity of the people making consequential decisions is limited.
Moreover, research suggests that more homogenous teams (as one finds when only a small group of people — or even a single individual — is in power) perform more poorly when tasks involve imagination, creativity and out-of-the-box problem solving. Precisely because it is harder to come to an agreement on information and its implications, more diverse teams do a better job.
Discourages sharing uncomfortable news
The people most likely to encounter evidence that the world is changing tend not to be comfortably seated in corporate headquarters. They are at what the late businessman Andy Grove long ago called the "edges" of the organization.
It's the person at Facebook who first noticed something strange going on with accounts that could be traced to Russian operatives, only for Facebook's then-security chief to be met by anger from the top of the company when he shared early findings in a conference room deliciously named "only good news," according to The New York Times. It's the whistleblower at Nissan who pointed out that all did not seem well with respect to the car company's books. And they're the external analysts looking at GE's businesses and wondering whether something wasn't "broken" over there, despite corporate management's denials that anything was problematic at all.

Enables self-interested decisions
When power is overconcentrated in a few players, executives have the latitude to take actions that are comfortable for themselves, but not necessarily consistent with the good of the organization or the people in it. While this should be obvious, we still see many examples of how long-term decisions are colored by the outcomes that will reward the most powerful, even if they prove negative in the longer term.
This can take the form of outright criminal behavior, as the allegations against Carlos Ghosn — which he has denied — imply. Or it can take the form of claiming generous retirement payments, stock options and access to company resources, as has apparently happened with Jeff Immelt, who used a spare plane for travel until 2014, according to GE. During his tenure, GE's decisions to buy back its own stock (which has the effect of strengthening the share price) were blamed for contributing to GE's cash problem.

Or it can take the form of prioritizing advertising revenue over the protection of a user's confidential information and strict adherence to the law. According to a complaint filed by the Housing and Urban Development Department, Facebook, for instance, has promised advertisers it won't show housing ads to people in protected classes, such as the disabled who might need certain accessibility, which is considered housing discrimination and actually illegal (and for which the company is being sued — Facebook said it would address HUD's concerns).

Given these obvious drawbacks, why are so many organizations working under governance structures that expose them to these risks? One reason is that good governance, challenging group discussions and quests to find real information, is hard. It takes time and effort to identify and recruit diverse board members. It can feel uncomfortable to insist that the influence of more powerful people be reduced. And bringing women and underrepresented groups into the conversation means the conversation itself is likely to be different. Nonetheless, it's an effort worth making — unless you want your organization to star in the next set of shocking corporate headlines.

Russia’s Rosneft aims for $500bn worth of energy deals with China www.rt.com

Russian energy major Rosneft has a “leading role” to play in ensuring China’s energy security, according to the company’s Chief Executive Igor Sechin.
Speaking at the first Russian-Chinese Energy Forum in Beijing, he said the total volume of Rosneft’s crude shipments to China is expected to exceed 50 million tons this year. “Rosneft is one of the leaders in terms of petrochemical supplies to China,” he said.

Mongolia-Hungary road transport agreement established www.montsame.mn

Ulaanbaatar /MONTSAME/ During the Mongolia-Hungary intergovernmental commission’s meeting held in Budapest, Hungary, an intergovernmental agreement on freight and passenger transportation by road transport was initialed.

President receives ambassadors of the European Union and its member states www.president.mn

Ulaanbaatar /MONTSAME/ Today, President of Mongolia Khaltmaagiin Battulga received resident and non-resident ambassadors of the European Union (EU) and its member states to Mongolia.

Private entities request swap deals to stabilize FX rate www.zgm.mn

Yesterday, the Bank of Mongolia (BoM) received the representatives of Top 200 private entities to discuss the current business environment and economic situations. Participants addressed the necessity of swap agreements in coordination with currency volatility and corporate planning of private entities.

Mongolian Ambassador to Sweden resigns after three months www.news.mn

Mongolian Ambassador to Sweden O.Enkhtsetseg has presented her resignation letter to the Ministry of Foreign Affairs. In the letter Ms. O.Enkhtsetseg requested to resign from the post for private reasons.

Why the US Should Build on Its Role as Mongolia’s ‘Third Neighbor’ www.dailysignal.com

Mongolia, a landlocked nation of about 3 million people between China and Russia, has become an increasingly important geopolitical partner to the United States.

America’s relationship with Mongolia is not insignificant and provides many opportunities for both countries.

The United States established diplomatic relations with Mongolia in 1987. Since then, the U.S. has been firmly regarded as Mongolia’s most important “third neighbor”—a country that does not border Mongolia, but has strategic relations with it.

Over the past three decades, Mongolia has been a reliable diplomatic ally of the U.S. The country’s transition to stable democracy has been notable, too, especially among former Soviet republics.

Mongolia’s multiparty parliamentary system has yielded an open society, where political dissent is the norm, parliamentary debate is spirited, and compromise between parties is not uncommon.

That contrasts starkly with the rest of post-Soviet Central Asia, where some presidential governments have resulted in autocracies.

The State Department’s Congressional Budget Justification for Foreign Operations for fiscal year 2019 asserts that the “primary goals of U.S. assistance to Mongolia are to ensure the United States remains a preferred partner over geographical neighbors Russia and China, and to give Mongolia greater latitude to chart an independent foreign and security policy.”

More importantly, Mongolia has been considered as an “emerging partner” and as a country with which the U.S. may cooperate to achieve a “shared vision of rules-based order in the Indo-Pacific.”

In fact, Mongolia has already demonstrated a strong commitment to working with the United States on strategic issues.

Mongolia is one of nine NATO “partner” nations, along with Japan and South Korea, in East Asia. Mongolia participates in United Nations global peacekeeping operations and has more than 1,000 peacekeepers deployed in Africa.

Mongolia sent troops to Iraq from 2003 to 2008, and currently has more than 200 troops in Afghanistan serving together with American forces.

All in all, Mongolia has maintained a constructively engaging relationship with the U.S. However, more can and should be done in enhancing bilateral interaction.

In particular, the U.S.-Mongolia economic relationship needs to evolve from one largely based on aid and various types of technical assistance to a partnership based much more on private sector-driven trade and investment.

The Trump administration’s ongoing efforts to raise the American profile and elevate its participation in the region are well-advised. However, without a distinct trade component, they are likely to amount to little more than an empty gesture.

The U.S. efforts need substance, and substance that can count in a concrete and practical way is trade.

To that end, Rep. Ted Yoho, R-Fla., and nine other members of the U.S. House of Representatives have introduced a bipartisan trade bill concerning the United States and Mongolia.

The proposed Mongolia Third Neighbor Trade Act seeks to deepen the U.S.-Mongolia trade relationship. The bill could play a practical role in ensuring Mongolia’s ongoing economic development by incentivizing targeted economic reforms.

Over the past three decades, the United States and Mongolia have made the strategic choice to forge and defend a relationship based on “shared commitment to freedom, democracy, and human rights.”

That choice must be reinforced with concrete and practical action that can further enhance the two nations’ partnership. Increased trade is the logical step forward.

COMMENTARY BY Anthony B. Kim

Anthony B. Kim researches international economic issues at The Heritage Foundation, with a strong focus on economic freedom. Kim is the research manager of the Index of Economic Freedom, the flagship product of the Heritage Foundation in partnership with The Wall Street Journal.

Rio Tinto to proceed with $2.6B iron ore mine in Western Australia www.reuters.com

Nov 29 – World No. 2 iron ore miner Rio Tinto gave the long-awaited green light for a $2.6 billion iron ore mine in Western Australia, with first production expected within three years.

‘Baby Yak’ to be exported to Norway www.montsame.mn

Arkhangai /MONTSAME/. One of the local brands of Arkhangai aimag, Baby Yak, is to begin exporting scarves and swaddle blankets to Norway.

Gigi Hadid’s Favourite Cashmere Comes With A Sustainable Caveat www.vogue.co.uk

Depending on what you read, cashmere is an ecological catastrophe waiting to happen. The boom in popularity of this once ultra-luxurious wool, and the subsequent proliferation of cut-price cashmere sweaters on the high street, has apparently forced the cashmere industry to its crisis.

Mongolia, where the majority of the world’s cashmere is produced, is bearing the brunt of the increase in demand. With temperatures frequently hitting -40 degrees Celsius, the region’s goats have developed fluffy undercoats to protect themselves over the harsh winters; these are then sheared by nomads in April-time and sold to manufacturers. Reports suggest that with an increase in demand for wool, more goats have been raised on the pastures than the grasslands can handle. There is also concern for the nomad herdsmen’s welfare, as prices have fallen dramatically. Then there’s the issue of quality: a lot of companies claim to source from Mongolia, but are actually purchasing wool from Inner Mongolia, an autonomous region of northern China.

So, where to go for ethically-sourced, sustainably-produced cashmere as temperatures in the UK drop? Try Mandkhai, a newish brand by Mandkhai Jargalsaikhan, which specialises in goat-to-garment transparency, not to mention deliciously soft cashmere. The 30-year-old designer knows her wool: she is Mongolian, and her parents were the first family to set up shop in post-Communist Mongolia twenty-five years ago, with a cashmere factory. The family’s two factories now comprise one of the country’s biggest cashmere manufacturers – as well as a tourist hotspot. “I can remember Julia Roberts and Richard Gere dropping by the factory to see the spinning machines when I was a child!” Jargalsaikhan laughs.

Mandkhai designs are as cosy and comforting as one would expect – and Gigi Hadid is a fan. The model has been regularly spotted in New York swaddled in her chunky mocha-hued, Mandkhai ribbed cashmere coat. “People think we paid her – but we loaned a sample via our PR company and she must just like it,” Jargalsaikhan says. “My dad doesn’t know who she is, but we see a spike in sales on our website every time she wears it!”

Jargalsaikhan came to London in her twenties to study fashion and marketing and has never left. Having completed a post-university accountancy course – “I need to know my numbers” – she set up her own brand in addition to acting as a wool supplier to designers including Rejina Pyo and Grace Wales Bonner. “There was a gap in the market for something different and modern. We’ve moved on from the navy blue crew-neck. And people are looking for quality and transparency.”

Ah – transparency. How can she guarantee her wool comes from happy goats and equally happy herdsmen? “The goats and sheep we source our wool from are free-roaming, so there’s lots of land for them to graze on,” she says. “We’ve been working with the same nomads for years so we always pay them a fair price – over 60 per cent of the price of each garment goes on raw materials, and I know that they have a good quality of life. Then there are the women in the factories, many of whom have worked with our family for years.” The factories, one of which deals with dyeing and spinning of the raw materials, the other for processing and knitting, are run by Jargalsaikhan’s mother, “an encyclopaedia of cashmere” who trained in knitwear in Japan.

Furthermore, reports that Mongolia’s cashmere industry is devastating the land have been exaggerated, Jargalsaikhan asserts. “Mongolia is a huge country – it’s five times the size of Germany – with only three million people living in it. Many of the herds are free-roaming so they don’t decimate the land because they’re moving around a lot. A lot of the sheep who provide the cashmere wool which is harvested every year in April actually die over the winter due to the cold. So, nature has its way of balancing out the herds.” Her family’s factory produces very little waste. “We sell on anything left over to make felt. I looked into what happens to the fabric over time, and it is entirely biodegradable, so there’s no damage to the environment, unlike the fibres in a synthetic sweater.”

Not that she’d ever purchase a synthetic fibre – this is a woman who lives in cashmere, 24/7. “I know I’m very lucky,” she laughs. “But it’s just the best fabric in the world.”