How do you manage changes in your company’s share ownership structure?
Cass hosts leading practitioner debate on corporate governance and the changing investor landscape
In a lively debate recently hosted by Cass Business School at The Henry Welcome Auditorium leading corporate governance practitioners have examined the future of regulation and governance as the share ownership landscape in UK companies changes in the wake of the financial crisis.
As part of a full day conference the practitioner panel session saw representatives from Blackrock, The British Venture Capital Association, Norges Bank Investment Management, USS Pension Fund and Capital International debating their institutions' engagement strategies with portfolio companies and their implications for corporate governance.
The conference opened with Stephen Haddrill, CEO of the Financial Reporting Council (FRC) delivering the keynote speech on how changing patterns of share ownership affect compliance with the Stewardship Code developed by the FRC in July 2010 that presents best practise guidelines in terms of shareholders' involvement with companies.
Following Mr Haddrill, Cass Professor Igor Filatotchev previewed his new research into shareholder patterns of FTSE 100 companies, partially funded by the Financial Reporting Council (FRC), and set the context of the discussion to follow.
Introducing the debate, Professor Filatotchev acknowledged that the panellists represented different types of institutional investors and asked "what is the future of investor engagement with companies in their portfolios?" Michelle Edkins, Head of Corporate Governance Europe, BlackRock began the discussion indicating that although corporate governance rules are global, effective implementation lies at a local level and that "Corporate governance is less about rules but more about assessing leadership and management with the aim of long term value creation"
She adds that corporate governance also involves behavioural issues and that "Guidance, best practise and shared experience" underpin the acceptance of "Good soft regulation".
Gavin Grant, a Head of Ownership Strategies, Norges Bank Investment Management, one of the largest Sovereign Wealth Funds active in the UK, indicated that good research is imperative in ensuring the quality of engagement indicating that "long term underperformance is a governance problem and better quality research will lead to higher returns".
Dr Daniel Summerfield, Head of Responsible Investment, USS Pension Fund and Ida Levine, Director at Capital International added to the debate with Dr Summerfield acknowledging that "Corporate governance is now a mainstream tool for long term success."
Ms Levine applauded the advancement of corporate governance policy in the UK in comparison with the US commenting that the US was perhaps regressing in terms of its policy on corporate governance and pointed to the Stewardship Code in the UK as a good example of corporate governance developing in changing financial climates.
Summing up the event Colin Ellis, Chief Economist, British Venture Capital Association, said: "Corporate governance is very much back in the spotlight and events such as this enable us to compare notes on the latest developments. Combining academic research with professional and regulatory comments helps to ensure the benefits of best practise are shared and developed.
Dr Christina Makris, Business Development Manager at Cass added "This event is a successful example of how Cass's leading research centres combine new academic research with practitioner review and feedback. It's important that our research demonstrates impact and insights to user communities, while maintaining academic rigour and objectivity."