CFA Institute recently published the report “Corporate Governance and ESG Disclosure in the EU”, which looks at how corporate governance practices have evolved over the past years and examines the impact of sustainability measures that have been introduced in the European Union in the context of the Renewed Sustainable Finance Strategy and the Action Plan on Financing Sustainability Growth. The study also focuses on how companies can take into account open market perspectives while continuing to seek corporate success and create shareholder value.
Most countries either require or recommend separation of independent directors, but India had long incentivized this separation by requiring a higher minimum ratio (50% instead of 33%) of independent directors on boards on which the chair is also the CEO.
If we learn anything from the recent market volatility, it is that in unprecedented times like this, companies with superior governance, risk management, and accountability will have a higher chance of survival and outperformance.
Institutional investors continue to recognize the importance of their stewardship activities working to improve companies’ ESG, pay, and fiduciary practices through corporate engagement and proxy voting.
Recent contested proxy vote at Proctor & Gamble highlights the antiquated approach to counting ballots from registered shareholders. The approach is bad corporate governance and needs to change.
July’s corporate governance news includes a new stewardship code, tracking ESG indexes, a win and a loss for dual-class shares, disclosing executive pay, and possible changes to a listing regime.
A new index for tracking the performance of non-state-owned organizations and moves toward taking some steps that are counter to good corporate governance made news in June.
Although there have been improvements in executive compensation practices, there are still more improvements that need to be made.
Pushing for gender diversity on boards, adopting stewardship principles, and creating an index to rank firms on their corporate governance are a few of the highlights in corpgov news for May.
Japan, Malaysia, and UK release updates to their corporate governance codes, and in the US, issues continue to swirl around Snap’s IPO and the Financial Choice Act.
Firms that moved to the Novo Mercado single-class structure experienced higher firm performance, but face continuing criticism that reforms did not eliminate the dominance of controlled companies.