Wednesday, May 28, 2014

ICGN Proposes Revised Corporate Governance Principles

Author: David Schwartz J.D. CPA

On March 28, 2014, the International Corporate Governance Network (ICGN), an investor-led organization of governance professionals interested in international corporate governance practices, published its a proposed draft revision to its Global Governance Principles. The draft principles take into account the ICGN’s 2009 Global Corporate Governance Principles and other ICGN guidance, together with recent changes in corporate governance regulation and practice. This proposed revision is the first time the ICGN has produced a single set of governance principles which embrace the governance responsibilities of board directors and investors alike in one document.

Comments (0)
Number of views (19213)
Full Article

Categories: All, Change Overview and Rationale, Formal Regulatory Remedies, Lender Directed Voting

Tags: Corporate Governance, ICGN

Friday, April 25, 2014

Switzerland's Say on Pay Law Could Put Swiss Pensions in a Bind

Better Corporate Governance, But at What Price?

Author: David Schwartz J.D. CPA
On March 3, 2013, Swiss citizens voted overwhelmingly to approve the Minder Initiative, giving shareholders far-reaching influence over the executive compensation and corporate governance matters of publicly traded Swiss companies. Though the first corporate elections under the new Swiss say on pay law will not occur until 2015, institutional investors are beginning to worry potential unintended consequences. For instance, the Minder rules require Swiss shareholders to vote on the aggregate compensation of directors and senior management for each of the equities in their portfolios. This requirement could cause problems for Swiss pension funds and other Swiss institutional investors who wish to engage in securities lending. Typically, when a security is lent out, the right to vote the share passes to the borrower. Will the new law requiring pension funds to vote at the annual general meetings of companies either headquartered or listed in the country effectively prevent them from lending their Swiss securities?
Comments (0)
Number of views (16034)
Full Article

Categories: All, Change Overview and Rationale, Commentary, Formal Regulatory Remedies, Lender Directed Voting

Tags: Minder

Tuesday, July 16, 2013

Are Institutional Investors Voting Proxies with the Correct Mindset?

Author: David Schwartz J.D. CPA
The federal government is not now and has never been in the business of telling you how you should vote your proxies. But it seems that through regulatory creep, the government may have indirectly given the power to tell investors how to vote their proxies to someone else entirely. Regulating disclosures and mechanics by which we vote proxies is plainly within the scope of the Securities and Exchange Commission's mission. However, the federalization of proxy regulation may be driving institutional investors and investment advisers, to view their responsibility to vote on proxy matters with more of a compliance mindset than a fiduciary mindset. This compliance mindset has had the effect of entrenching proxy advisory firms solidly in the voting process and given them an outsized say in the way most proxy shares are voted. The federal government may not be dictating how institutional investors vote their proxies, but in a presumably unintended consequence, by regulation have given this power to proxy advisory firms.
Comments (0)
Number of views (17506)
Full Article

Categories: All, Change Overview and Rationale, Commentary, Lender Directed Voting

Tags: Proxy Voting

Tuesday, April 23, 2013

With Power Comes Responsibility. Institutional Investors' Role In Corporate Governance.

Author: David Schwartz J.D. CPA
Over the past sixty years, as more and more people in the US have begun to participate in the capital market through retirement plans, mutual funds, ETFs and other pooled investment vehicles, institutional investors have grown from bit players in the markets, owning about 5% of US equities prior to 1945, to being major players today, owning greater than 67% of US equities. This growth in the proportion of assets managed by institutional investors has also been accompanied by a dramatic growth over the same period in the market capitalization of US listed companies.  As a result, institutional investors now own a larger percentage of a much larger market. This massive increase in US equity ownership by institutional investors brings with it great proxy voting power as well.    Given their outsized level of ownership, institutional investors are now faced with new pressures to exercise a real and abiding role in corporate governance.
Comments (0)
Number of views (16262)
Full Article

Categories: All, Change Overview and Rationale, Commentary, Lender Directed Voting

Tags: LDV

Saturday, August 11, 2012

Should We Be Alarmed About Empty Voting?

Author: David Schwartz J.D. CPA

Should we be alarmed about empty voting? According to a recent article, "A Call to Arms on Empty Voting!" by Andrew MacDougall, Robert M. Yalden and Jeremy Fraiberg, yes, we should indeed.  Using a proxy battle over a proposal by Canadian company, TELUS to eliminate its dual class share structure earlier this year  as an example, MacGougall, Yalden, and Fraiberg assert that as "the number of public M&A transactions increases, and if U.S. hedge funds continue to look for opportunities in Canada to engage in strategic gamesmanship, concerns about empty voting will also increase."

 
Comments (0)
Number of views (17467)
Full Article

Categories: All, Change Overview and Rationale, Formal Regulatory Remedies, Lender Directed Voting

Tags: LDV, Empty Voting

RSS
12

Topics