Views on improving the integrity of global capital markets
08 December 2016

CorpGov Roundup: Transparency a Common Denominator in Recent Governance Reforms

New guidelines launched in South America, Asia, and Europe stress ethical stewardship and communication among stakeholders. Brazil’s Association of Capital Market Investors recently adopted a stewardship code during the group’s 10th anniversary events. Amendments have been proposed to the German Corporate Governance Code. In South Africa, the most recent version of the King Report focuses on a principles-based approach and the responsibilities of stakeholders. Stewardship Asia also just launched a set of seven stewardship principles meant to enable investors to be more active and responsible. In the United States, GAMCO intended to be the first to use proxy access to nominate a candidate to the National Fuel Gas board.


The stewardship code put forth in June by Brazil’s Association of Capital Market Investors (AMEC – Associação de Investidores no Mercado de Capitais) was adopted recently at the organizations’ 10th anniversary celebrations.

According to the code, to meet their fiduciary duty toward the end beneficiaries, institutional investors should do the following:

  1. Implement and disclose a stewardship program
  2. Implement and disclose mechanisms to manage conflicts of interest
  3. Take ESG (environmental, social, and governance) factors into account in their investment processes and stewardship activities
  4. Monitor the issuers of invested securities
  5. Be active and diligent in the exercise of their voting rights
  6. Establish collective engagement criteria
  7. Be transparent about their stewardship activities


Amendments have been proposed to the The Deutscher Corporate Governance Kodex (German corporate governance code). The code continues to focus on transparency as a hallmark of good corporate governance. It also updates board composition recommendations and speaks to the supervisory board’s role in investor engagement.

Comments on the proposals are due 15 December 2016.

South Africa

The King IV Report on Corporate Governance (King IV) was launched in November by the King Committee and the Institute of Directors in Southern Africa (IoDSA).

This most recent King Report is the 4th edition of the King report. King III’s 75 principles have been reduced to a 16 in King IV, with an additional 17th principle that is applicable to institutional investors, such as retirement funds and insurance companies. King III was updated in 2009, so much has changed in the governance world since the last King report. The new report focuses on a principles-based approach instead of a rules-based approach and updates the previous reports’ stance on remuneration policy, engagement, transparency and disclosure, and the responsibilities of stakeholders.


Stewardship Asia recently launched its Singapore Stewardship Principles for responsible investors. The principles are meant to enable investors to be active and responsible shareholders. The following are the seven principles:

  1. Take a stand on stewardship. Responsible investors establish and articulate their policies on their stewardship responsibilities.
  2. Know your investment. Responsible investors communicate regularly and effectively with their investee companies.
  3. Stay active and informed. Responsible investors actively monitor their investee companies.
  4. Uphold transparency in managing conflicts of interest. Responsible investors make known their approach to managing conflicts of interest.
  5. Vote responsibly. Responsible investors establish clear policies on voting and exercise their voting rights in a responsible fashion.
  6. Set a good example. Responsible investors document and provide relevant updates on their stewardship activities.
  7. Work together. Responsible investors are willing to engage responsibly with one another where appropriate.

The members of the working group behind the principles include the following groups and organizations:

United Kingdom

Late in November, the UK Department of Business, Energy, and Industrial Strategy released its Corporate Governance Reform: Green Paper.

This green paper seeks views on three areas:

  1. Shareholder influence on executive pay, which has grown much faster over the last two decades than pay generally on typical corporate performance.
  2. Whether there are measures that could increase the connection between boards of directors and other groups with an interest in corporate performance, such as employees and small suppliers.
  3. Whether some of the features of corporate governance for listed companies should be extended to the largest privately held companies at a time in which different types of ownership are more common.

Responses to the paper are requested by 17 February 2017.

United States

Proxy access has been around for a few years now, and it was about to get its first test when GAMCO Investors, headed by Mario Gabelli, filed a Schedule 13D announcing its intended use of proxy access to nominate a director candidate at National Fuel Gas Company. And then GAMCO withdrew its proxy access nominee.

GAMCO and other entities controlled by Gabelli own nearly 8% of the shares of National Fuel Gas Company and have held at least 3% for three years. GAMCO announced its intention to nominate Lance A. Bakrow, the co-founder and a director of Greenwich Energy Solutions, to the National Fuel Gas board.

National Fuel Gas adopted a proxy access bylaw in March allowing shareowners who had held at least 3% of its shares for three years or longer to nominate up to 20% of the board. The company challenged GAMCO’s nomination arguing that its nominee was not eligible because GAMCO had in the past advocated splitting up the company. According to the company’s bylaws, the company’s proxy access procedures are limited for use by an investor who wants to nominate a board candidate but has not advocated and is not advocating to change or influence control of the company.

[Editor’s note: Post was updated 13 December 2016]

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Photo credit: ©

About the Author(s)
Matt Orsagh, CFA, CIPM

Matt Orsagh, CFA, CIPM, is a senior director of capital markets policy at CFA Institute, where he focuses on corporate governance, ESG, and climate change analysis. He writes and speaks frequently on these topics on behalf of CFA Institute. His paper, Climate Change Analysis in the Investment Process was named “Best ESG Paper” by Savvy Investor in 2021.

3 thoughts on “CorpGov Roundup: Transparency a Common Denominator in Recent Governance Reforms”

  1. John Wilcox says:

    Hello Matt —

    Can I get on the subscription list for your excellent publication? It is sent to me from time to time by colleagues, but I would benefit from seeing it regularly. You are one of the few experts following global developments as well as U.S.

    Many thanks.


    1. nicolelee says:

      If you are interested in subscribing, please visit:

      Thank you,
      Editor, Market Integrity Insights Blog

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