Financial Times (December 8)
“Greater shareholder engagement with quoted companies has been one of the key themes in corporate governance to emerge since the financial crisis” and underpins the UK’s stewardship code for institutional investors. In the U.S. as well, there has been a “recent upsurge in activist investing,” along with “growing demands by long-term institutions for greater input.” This creates potential for progress. “It can only be good that shareholders take an active interest in the businesses in which they invest.”
Tags: Activists, Corporate governance, Engagement, Financial Crisis, Institutional investors, Shareholders, Stewardship code, U.S., UK
Washington Post (July 11)
“The eclipse of the long-term shareholder has been accompanied by the eclipse of the individual shareholder.” Over 90% of shares in U.S. companies were held by individuals in the 1950s when the average share was held 7 years. Today, it’s about 30-35% and just 6 months. Institutional investors now make up the difference, but this raises some problems. “Investment funds that hold shares in many different companies often lack the resources to focus on a single corporation’s performance.” As such, they may not be properly fulfilling their role in ensuring effective corporate governance.
Financial Times (November 27)
Since 2010, chairmen have been required by the UK Code on Corporate Governance to personally report on how the principles relating to the role and effectiveness of the board are being applied. Yet, the “chairmen of FTSE 350 companies are failing to take responsibility for corporate governance, with half making no mention of the issue in their annual report statements according to a review by Grant Thornton.”
Tags: Annual reports, Boards, Chairmen, Corporate governance, FTSE 350, UK
Wall Street Journal (February 18)
Corporate governance remains weak in Japan, partly because shareholders are too passive. “Japan Inc. has been run, and overseen, by corporate insiders, with shareholders’ interests often taking a back seat.” Among especially bad practices, the Journal points to low returns, cross-shareholdings and “the massive dilutive, follow-on issues that lack compelling equity stories—many of them to make up for mismanagement.”
Tags: Corporate governance, Japan, Returns, Shareholders
