US business leaders call for backing of “common sense corporate governance principles”

Jamie Dimon

A group of 13 US and Canadian fund managers, pension funds and company bosses have taken the unprecedented step of endorsing a set of corporate governance principles in a bid to quell rising unease and conflict around US governance standards.

In an open letter the business leaders, who include Jamie Dimon, chairman and chief executive of JP Morgan Chase, Larry Fink chairman and chief executive of BlackRock, veteran activist investor Warren Buffet head of Berkshire Hathaway, Mary Barra, chairman and chief executive of General Motors and Mark Machin chief executive of  the Canada Pension Plan Investment Board, indicate that while they have various opinions on corporate governance, “We share the view that constructive dialogue requires finding common ground — a starting point to foster the economic growth that benefits shareholders, employees and the economy as a whole.… Read the rest

A strong, healthy company culture adds long-term value

A strong corporate culture that is embedded throughout a company and reinforced with strong leadership by the chief executive and chairman can produce long-term value for businesses a study by the Financial Reporting Council has found.

The report, based on a series of interviews with company secretaries, chairmen and chief executives, explores the relationship between corporate culture and long-term business success in the UK.… Read the rest

Investors & companies “in the dark over value of the workforce”

PLSA Toolkit

Understanding the value of a company’s workforce is important for investors, and companies should improve their reporting on this and be able to link this reporting to their wider company strategy and business model, according to the Pensions and Lifetime Savings Association (PLSA).… Read the rest

UK audit report: competition concentration concerns

FRC to undertake thematic reviews

frc-logo-370x229Confidence in the quality of auditing is improving according to the UK’s Financial Reporting Council,  however there remains concerns about the level of concentration in the market which is dominated by four major firms.

The overview of auditing report is the first since becoming the country’s Competent Authority for audit under EU rules.… Read the rest

Shareholder haircuts: ECJ ruling backs Slovenian investors

Kristjan Verbic of VZMD

Kristjan Verbic of VZMD

The Slovenian Shareholders Association (VZMD)  says that a European Court of Justice (ECJ) ruling backs their claim for a settlement from the Slovenian government after it restructured its banking sector, including nationalising six banks, during 2013 and 2014.… Read the rest

Prominent ESG investor objects to US legislators’ plans to curb proxy advisers

BlackRock climate change

Walden Asset Management has added its voice to those criticising the proposed Corporate Governance Reform and Transparency Act of 2016 (HR 5311) passed last month by the US House of Representatives’ Finance Services Committee.

In a letter to  Jeb Hensarling the chairman and Maxine Waters, a member of the committee the ESG-focused asset manager Walden agreed with other opponents of the bill believing that it undermined proxy voting providers whose services provided research and guided the proxy voting decisions of institutional investors.… Read the rest

Companies and investors need to act on executive pay, PwC believes

While regulation on directors’ pay can be counter-productive the business community needs to address the concerns of politicians and the wider public about pay inequality in the UK, advisors PricewaterhouseCoopers (PwC) have warned in a report. This is a response to Teresa May’s pledge to tighten up executive pay regulation made just before she became Prime Minister and reported on in a previous blog.… Read the rest

FRC chairman encourages high standards in companies and by investors

Some UK investors can do more to show their commitment to the Stewardship Code’s principles according to Sir Win Bischoff, chairman of the Financial Reporting Council (FRC) speaking at the Chartered Banker’s Culture and Conduct Forum for the Financial Services Industry this week.… Read the rest

US investors and companies are engaging more and seeing value in corporate governance

Institutional investors in the US are increasingly viewing corporate governance as more than just a compliance exercise but also about an ownership responsibility tied to investment value and risk mitigation, according to Ernst & Young’s (EY) analysis of the 2016 proxy season.… Read the rest

Investors have role to play in tackling forced labour

Investors need to engage more effectively with companies on forced labour and ensure that firms are meeting reporting requirements according to the latest Investor Briefing by pressure group, ShareAction.

The briefing includes examples of shareholder engagement with companies as well as policy makers which has led to action being taken against the use of forced labour by suppliers.… Read the rest

As board diversity stalls, new push to breakdown barriers and improve pipeline

After the initial push to increase board diversity over the past five years, progress appears to have slowed according to two reports published by the UK government and Cranfield School of Management.

The UK government has therefore launched a review focusing on increasing female representation to 33% of boards across the FTSE 350 by 2020.… Read the rest

Investors have a role in tackling UK’s low productivity

Tackling low business productivity levels since the 2008 financial crisis and recession requires more long-term thinking from investors according to the report  How Good is Your Business Really? Raising our ambitions for business performance published last week by the UK’s business-led Productivity Leadership Group (PLG).… Read the rest