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Monthly Roundup - November 2018
activism
europe
north america
australia
asia
africa
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Latest Georgeson publications
PSR18

Georgeson's 2018 European Proxy Season Review
Each year Georgeson publishes an annual review of the European AGM season, containing a comprehensive analysis of trends witnessed in the following major markets: UK, France, the Netherlands, Germany, Switzerland, Italy and Spain.

The 2018 version is avaiable for download at:
https://www.georgeson.com/uk/2018-season-review 

ACGR18 Georgeson's 2018 US Annual Corporate Governance Review
Georgeson and Proxy Insight are pleased to present the 2018 Annual Corporate Governance Review.The report offers a comprehensive set of 2018 proxy season data, including voting data for companies that held an annual and/or special meeting during the time period July 1, 2017 through June 30, 2018. 

The 2018 version is available for download at:
https://www.georgeson.com/us/news-insights/annual-corporate-governance-review 
Shareholder Activism
  • The Times reports that Edward Bramson set to demand board seat at Barclays: https://www.thetimes.co.uk/edition/business/edward-bramson-set-to-demand-board-seat-at-barclays-fr8ssmzrt. “The activist investor pushing Barclays to curtail its investment banking ambitions has told other shareholders that he could push for a seat on the board if he feels he is being ignored. Edward Bramson could begin a proxy fight against Barclays if he does not get the response from the bank he was looking for, a leading UK fund manager said. Mr Bramson’s Sherborne Investors became one of the largest shareholders in Barclays this year, buying a stake of little over 5 per cent with a view to putting pressure on it to increase returns through cutting back its investment banking business.”

  • The Financial Times reports that Premier Foods CEO to depart after announcing Ambrosia brand sale: https://www.ft.com/content/b7c18f10-e71a-11e8-8a85-04b8afea6ea3. “Gavin Darby to go in January after activist investor Oasis tried to oust him this summer.”

  • Reuters reports that Panalpina’s chairman to leave in May; activist had demanded he quit: https://www.reuters.com/article/panalpina-cevian/panalpinas-chairman-to-leave-in-may-activist-had-demanded-he-quit-idUSL8N1XU56V. “Swiss logistics company Panalpina said on Monday that Chairman Peter Ulber would not stand for re-election at the next annual general meeting in May. The air and sea freight company has come under pressure to change its chairman from activist shareholder Cevian Capital, which has a 12.3 percent stake. Last month, Cevian’s co-founder Lars Forberg told Swiss magazine Bilanz [Panalpina] should replace its chairman and should be open to mergers. Panalpina declined to comment on Ulber’s reason for leaving. Ulber said his decision not to stand for re-election was in the best interest of Panalpina and all of its stakeholders.”

  • The Daily Telegraph reports that Star investor Neil Woodford accused of ‘dereliction of duty’ in Stobart case: https://www.telegraph.co.uk/business/2018/11/19/stobart-investor-accused-dereliction-duty/. “Star fund manager Neil Woodford has been accused of ‘dereliction of duty’ after refusing to meet Stobart chairman Iain Ferguson and backing a campaign for him to be ousted. The asset manager, one of Stobart’s biggest investors, faced scrutiny in the High Court as a bitter court case between the FTSE 250 company and its former chief executive moved into a second week. Mr Woodford denied allegations during cross-examination by Stobart’s legal team. He insisted he had been forced to pick sides in a boardroom battle between former chief executive Andrew Tinkler and Mr Ferguson earlier this year.”

  • Reuters reports that Ex-Telecom Italia CEO seeks shareholder vote after Gubitosi named new boss: https://www.reuters.com/article/us-telecomitalia-ceo/telecom-italia-appoints-luigi-gubitosi-as-ceo-idUSKCN1NN0RS. “Telecom Italia appointed Luigi Gubitosi as chief executive on Sunday, in a move seen as portending a more aggressive shake-up at the phone group and prompting his predecessor to call for a shareholder vote on the strategy turn. Gubitosi, a former head of telecoms group Wind and now state-appointed commissioner of struggling airline Alitalia, succeeds Amos Genish, the third TIM CEO to leave in as many years, who was unexpectedly fired last Tuesday over what sources said were disagreements with board members over strategy. Genish, who remains a TIM board director, said he would seek investor support to call an extraordinary shareholder meeting to contest the sudden changes. Support from investors holding 5 percent of the company is needed to call such a meeting.”

  • The Daily Telegraph reports that Hedge fund threatens FirstGroup board coup: https://www.telegraph.co.uk/business/2018/11/17/hedge-fund-threatens-firstgroup-board-coup/. “A Wall Street hedge fund is threatening an audacious boardroom coup at FirstGroup after accusing bosses of ‘driving the bus off the cliff’. ‘If they are deadly intent on continuing to do that then they must be ejected from their seats,’ said James Rasteh, chief investment officer of Coast Capital Management. Battle lines were drawn on Wednesday when the transport operator’s chairman Wolfhart Hauser wrote to all shareholders to reject previous criticism by Mr Rasteh.”

  • Cadwalader has published a memo entitled Delaware Court of Chancery Finds Director Breaches of Fiduciary Duty and Aiding and Abetting Liability for Activist Investor in Shareholder Class Action Suit: https://www.cadwalader.com/resources/clients-friends-memos/delaware-court-of-chancery-finds-director-breaches-of-fiduciary-duty-and-aiding-and-abetting-liability-for-activist-investor-in-shareholder-class-action-suit. “This decision is significant because the Court made a theme of director susceptibility or acquiescence to what it termed “activist pressure” the basis for its conclusions that fiduciary and disclosure duties had been breached.  Further, the decision appears to be the first occasion that a Delaware court has determined that a conflict of interest attendant to a breach of fiduciary duty could be present based solely on the Court’s perception that a shareholder director had a short term investment outlook absent any additional factors, such as extra or undisclosed compensation or other improper benefits.”

  • The Financial Times reports that Elliott calls for Hyundai to return £8bn in capital to shareholders: https://www.ft.com/content/bacbded0-e74d-11e8-8a85-04b8afea6ea3.
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Europe
  • We have published the Georgeson 2018 European AGM Season Review: https://www.georgeson.com/News/Contested%20director%20elections%20increase%20dramatically%20in%20Europe%20in%202018,%20says%20Georgeson.pdf. “Director elections became more controversial in some major Europe an markets during this year’s AGM season, a report released today by Georgeson has shown. In its 2018 Proxy Season Review, the world’s leading shareholder engagement firm and corporate governance advisor reports that the number of director election proposals at large cap companies that were opposed by at least one in 10 shareholders has doubled since 2016 in the UK and France (128% and 95% increases respectively). Increased investor concern was also evident in Germany, where there was a 114% increase in the number of contested  proposals relating to the discharge of the management and supervisory boards since last year. Georgeson says the trend reflects an increase in investor focus on directors at companies they consider unresponsive to shareholders’ demands. The review also shows that executive remuneration remains an area of intense focus for many investors across Europe, with large cap companies continuing to suffer intense levels of scrutiny.” See the full document here: https://www.georgeson.com/uk/2018-season-review. Based on this Georgeson analysis the Financial Times reported that European investors beef up stance over high executive pay: https://www.ft.com/content/f6dff44d-204f-30b7-a164-537f9214095c
     
  • ISS has announced its 2019 Benchmark Policy Updates: https://www.issgovernance.com/iss-announces-2019-benchmark-policy-updates/. “For its UK/Ireland and Continental European policies, in 2019, ISS will track significant audit quality issues, with a focus on accounting controversies, at the lead engagement partner level, wherever such information is available. Where the information is available, ISS research reports will note any lead audit partners who have been linked with significant auditing controversies and, where they are also identified as being engaged in the audit for other public companies, this connection will be raised for investor attention. A negative vote recommendation on auditor ratification may be applied in the most serious cases, e.g. where the lead audit partner has previously been linked with a corporate failure scenario or other material destruction of shareholder value arising from fraud or other accounting issues.” See the full documents here: https://www.issgovernance.com/policy-gateway/latest-policies/. Georgeson has issued a memo on these updates, which is available upon request.

  • Glass Lewis have published policy guideline updates for the main European markets: http://www.glasslewis.com/2019-policy-guideline-updates-united-states-canada-shareholder-initiatives-israel-2/ and http://www.glasslewis.com/2019-policy-guideline-updates-united-states-canada-shareholder-initiatives-israel-2-2/. “Glass Lewis evaluates these guidelines on an ongoing basis and formally updates them on an annual basis. For 2019, our guidelines are focused on several key areas, including board diversity, environmental and social risk oversight, auditor independence, executive compensation and shareholder rights. For a complete detail of the 2019 updates, please review the Summary of Changes within the relevant policy document.” The full documents are available here: http://www.glasslewis.com/guidelines/.
     
  • IP&E reports that European investment professionals reject forced consideration of ESG: https://www.ipe.com/news/esg/european-investment-professionals-reject-forced-consideration-of-esg/10027614.article. “Policymakers should not attempt to force ESG considerations onto investors through new rules, research by the CFA Institute has said.  The CFA surveyed 645 investment professionals and reported that, while the majority believed environmental, social and governance (ESG) factors should be taken into account in investment decisions, they rejected the idea of being legally forced into this.  Some 85% of respondents said they believed it appropriate for institutional investors to take ESG factors into account when making investment decisions.”
...and beyond
  • Pensions & Investments reports that Multiclass-share decision galvanizes investors to action: https://www.pionline.com/article/20181112/PRINT/181119983/multiclass-share-decision-galvanizes-investors-to-action. “Calls to level the playing field when it comes to multi- and dual-class shares are growing in light of MSCI Inc.’s decision not to eliminate companies with unequal voting structures from global equity indexes. The move last month surprised industry bodies, including those representing the institutional investor community – particularly since index provider rivals FTSE Russell and S&P Dow Jones Indices made moves last year to limit certain listings. S&P no longer admits firms with dual-class share structures to some of its most well-known indexes, including the S&P 500 index. Companies already in the index are grandfathered. And FTSE Russell decided that current and future developed market companies whose free-float market capitalization makes up less than 5% of total voting power would be excluded from its indexes.” Additionally, IP&E reports that Legal & General hits out at MSCI’s dual share class index move: https://www.ipe.com/news/esg/legal-and-general-hits-out-at-mscis-dual-share-class-index-move/10027583.article.

  • The Economist reports that Chief executives win the pay lottery: https://www.economist.com/business/2018/10/18/chief-executives-win-the-pay-lottery. “In Japan bosses have rarely been given share options, perhaps because the country’s stockmarket has never recovered from the bursting of the 1980s bubble. Owing also to an egalitarian mindset, Japanese executive pay is a little more than a tenth of that in America, and about a quarter of the British level. If the argument goes that executives have to be paid stratospheric salaries to run multinational businesses, this contrast seems odd. Japan has plenty of globally competitive companies in fields such as cars and robotics. In other words, it is not obvious that CEOs in America and Britain are raking it in because they are uniquely skilled. Moreover, their stock-option paydays have been driven in part by declines in interest rates, designed to boost the whole economy. Bosses have won the monetary lottery.

  • IR Magazine reports that Demand for off-season meetings ‘highest ever’, says SSGA’s ESG lead: https://irmagazine.com/esg/demand-season-meetings-highest-ever-says-ssgas-esg-lead. “When Rakhi Kumar joined State Street Global Advisers (SSGA) in 2011, the notion of off-season engagement didn’t exist. But by mid-October this year, Kumar – who serves as SSGA’s senior managing director and head of ESG investments and asset management – says the demand for meetings is ‘the highest we’ve ever received’.”  

  • The Financial Times reports that Rising investor interest pushes ESG funds past $1tn: https://www.ft.com/content/f1e98ec7-083e-3b95-8c6b-ecc4810b988e. “Assets under management in popular products increase 60% in just 6 years.”

  • Paul Hastings have published a report entitled Breaking the Glass Ceiling: Women in the Boardroom: http://www.paulhastings.com/GenderParity/. “Paul Hastings presents the fifth edition of Breaking the Glass Ceiling: Women in the Boardroom, our comprehensive survey of the legislative, regulatory, and private sector developments impacting the representation of women on corporate boards globally.” See the full document here: http://www.paulhastings.com/docs/default-source/pdfs/gender-parity-2018.pdf.  
UK
  • The Daily Telegraph reports that Persimmon boss ousted after refusing to hand back more of his £110m bonus: https://www.telegraph.co.uk/business/2018/11/07/persimmon-boss-landed-110m-bonus-quits-pay-distraction/. “Ousted Persimmon boss Jeff Fairburn turned down a final chance in recent weeks to save his job by handing back a bigger chunk of his controversial £75m bonus, The Daily Telegraph understands. A large proportion of the bonus has vested but cannot be cashed in until 2021. Mr Fairburn was offered the chance to forgo some of this. He declined. On Wednesday, the York-based housebuilder revealed it had asked Mr Fairburn to leave following mounting criticism of his record-beating pay package, which the company described as a ‘distraction’.”

  • The Investment Association have published their updated Principles of Remuneration: https://www.theinvestmentassociation.org/media-centre/press-releases/2018/high-pay-under-fire-in-toughened-investor-rules.html. “The 2018 Principles of Remuneration set out investor expectations and best practice for how companies should pay their top executives in line with the new Corporate Governance Code. Under the new Principles, investors will expect companies to: 1) Pay pension contributions to Directors in line with the rate given to the majority of the rest of the workforce, rather than giving higher payments as a mechanism for increasing total remuneration; 2) Broaden the triggers under which malus and clawback provisions can be used to forfeit or recover remuneration beyond the current triggers of ‘gross misconduct’ and ‘misstatement of results’, in order to make them a more effective tool to recover bonuses. Companies should also set out the process for implementing malus and clawback, not simply the triggers; 3) Require Directors to hold a proportion of their shares for a minimum of two years after their departure, so that they consider the long-term value of the company even after their departure; 4) Adopt new pay ratio reporting requirements early, to maximise transparency over pay and ensure that there is accountability for high levels of pay internally.” See here for the full document: https://www.ivis.co.uk/media/13874/Principles-of-Remuneration-Nov-2018-FINAL.pdf; and here for the open letter: https://www.ivis.co.uk/media/13871/2018-Letter-of-introduction-for-Principles-of-Remuneration-FINAL.pdf.  

  • The Financial Times reports that Bet365’s Denise Coates paid £220m in 2017: https://www.ft.com/content/543d1040-ed8c-11e8-8180-9cf212677a57. “Co-founder of online gambling group one of the world’s highest paid executives.”

  • The Hampton-Alexander Review has published its 2018 report, Improving gender balance in FTSE Leadership: https://www.gov.uk/government/news/ftse-companies-urged-to-appoint-more-women-leaders. “A government-backed review has today urged FTSE 350 companies to do more to meet the target of a third of women in senior leadership positions by 2020. Figures published today in the Hampton-Alexander Review’s 2018 report reveal the top 100 companies which make up the FTSE 100 index are on track to hit the target with more than 30% of board positions occupied by women. This has risen from 12.5% in 2011. However, in the FTSE 350 almost one in four companies have only one woman on their board, and there remain 5 all-male boards. This means half the appointments to board positions will have to be filled by women over the next 2 years to hit the targets.”

  • Reuters reports that Britain’s ‘broken’ audit sector must change - MPs: https://uk.reuters.com/article/uk-britain-accounts/britains-broken-audit-sector-must-change-mp-idUKKCN1NH01I. “Britain’s parliament will start an inquiry into auditing in January to ensure that two pending reviews will lead to actual reform of a ‘broken’ sector dominated by the Big Four accounting firms, a senior lawmaker said on Monday. Rachel Reeves, chair of parliament’s business select committee, said accounting scandals at construction firm Carillion, retailer BHS and cafe chain Patisserie Valerie showed that lawmakers must get involved to push through change. The Competition and Markets Authority (CMA) is due to report findings from its fast-track investigation of auditing, a sector where Deloitte, PwC, EY and KPMG check the books of 341 of Britain’s top 350 listed companies. A separate review for the government by John Kingman is looking at how the sector’s regulator, the Financial Reporting Council (FRC), could be strengthened. It will also report back by the end of the year.”

  • The Financial Times reports that Plan to tighten UK takeover rules are ‘disproportionate’: https://www.ft.com/content/e872204e-e6a1-11e8-8a85-04b8afea6ea3. “John Vickers says proposals would increase political interference and hit economy.”

France
  • CNN reports that Renault names acting CEO but keeps Carlos Ghosn on the payroll: https://edition.cnn.com/2018/11/20/business/france-renault-carlos-ghosn/index.html. “Renault appointed an acting chief executive on Tuesday but stopped short of removing Carlos Ghosn as CEO and chairman following his arrest on suspicion of financial misconduct in Japan. The company said in a statement that it would elevate chief operating officer Thierry Bolloré on an interim basis, giving him the same powers that Ghosn enjoys as CEO. It said independent director Philippe Lagayette would chair board meetings ‘during this period.’ Ghosn was detained by Japanese authorities on Monday after an internal investigation at Nissan, where he is also chairman, revealed ‘significant acts of misconduct’ over many years. The Japanese carmaker accused Ghosn of significantly under-reporting his compensation and misusing company assets. Japanese public broadcaster NHK reported Tuesday that the industry veteran had failed to properly disclose homes provided by Nissan in four countries.”

  • The AMF has published its 2018 report on corporate governance and executive compensation: https://www.amf-france.org/en_US/Actualites/Communiques-de-presse/AMF/annee-2018?docId=workspace%3A%2F%2FSpacesStore%2Fa4a2c9d8-af98-4bf7-b164-17500681cc04&langSwitch=true “For the fifteenth edition of its report, the AMF has chosen a new approach to the assessment of corporate governance practices and executive compensation at listed companies. As it does every year, the report details regulatory changes and areas of focus. However, this year’s report highlights two specific areas of interest in 2018: changes in top management and say on pay. This report represented a great opportunity to provide an overview of practices on these two hot topics. Ever since the French Financial Security Act was passed on 1 August 2003, the Autorité des marchés financiers has conducted an annual review of the disclosure of listed companies in the areas of corporate governance and executive compensation.” See here for the full document: https://www.amf-france.org/technique/multimedia?docId=workspace://SpacesStore/1087eb2e-c4e7-4b7b-9078-83d13848ffd1_en_1.0_rendition.  
Germany
  • The Government Commission on the German Corporate Governance Code has published proposed amendments to the Code for German listed companies: https://www.dcgk.de/en/consultations/current-consultations.html. “On 6 November the Commission published the draft of a revised Code and invites you to take part in a consultation process. The Code reform aims at increasing both the relevance and the acceptance of the code by companies and investors alike by curbing the Code, providing it with a new structure and improving its legibility. In line with these objectives new recommendations on independence and executive compensation are also envisaged. The Code intends to set standards that are crucial to a large variety of stakeholders in particular to allow as many as possible investors to use the code when assessing corporate governance of German companies. Against this backdrop the Commission has spent the previous year to prepare the draft of a new Code meeting the afore-mentioned requirements. The Commission is looking forward to receiving your comments.” See here for the draft document: https://www.dcgk.de/en/consultations/current-consultations.html?file=files/dcgk/usercontent/en/Consultations/2019/181106%20Draft%20amended%20GCGC.pdf. The consultation closes on 31 January 2019.

  • Handelsblatt reports about Warum Aufsichtsräte bei der Managervergütung oft ahnungslos bleiben ("Why supervisory boards often remain clueless about executive compensation"): https://www.handelsblatt.com/finanzen/maerkte/boerse-inside/vorstandsgehaelter-warum-aufsichtsraete-bei-der-managerverguetung-oft-ahnungslos-bleiben/23577364.html (in German). "German companies are confronted with vehement demands from their investors. The problem is that supervisory boards often do not know what investors want from them. A new study is proving frightening: half of the investors and voting advisors publish no or only insufficient requirements for the remuneration of the Management Board; 70 percent of the voting guidelines lack information that companies could use to be specific, such as calculating bonuses."
  • Reuters reports that there is Still a ‘lot of work to do’ for VW after diesel scandal - U.S. compliance auditor: https://www.reuters.com/article/us-volkswagen-compliance/still-a-lot-of-work-to-do-for-vw-after-diesel-scandal-u-s-compliance-auditor-idUSKBN1ND260. “Volkswagen and an independent monitoring team still have ‘a lot of work to do’ before the company’s compliance procedures can be certified after a $27 billion global emissions cheating scandal, Larry Thompson, an independent compliance auditor, said on Thursday. Thompson, a former deputy U.S. attorney general, was installed in 2017 as compliance auditor as part of VW’s criminal plea agreement with the U.S. Justice Department.”
Netherlands
  • Het Financieele Dagblad reports that Nieuwe wet geeft nog steeds geen grip op topbeloning bij beursfonds (“New law still does not give a grip on top remuneration at listed companies”): https://fd.nl/beurs/1274785/nieuwe-wet-geeft-nog-steeds-geen-grip-op-topbeloning-bij-beursfonds (in Dutch). “A new law that should give shareholders more influence on the remuneration of directors of listed companies largely misses its goal. Shareholders will soon receive not much more than a non-binding vote, according to Eumedion director Rients Abma, who represents the interests of institutional investors. Abma thus responds to the bill that the Ministries of Finance and Legal Protection have submitted this week. […] According to Abma, the oversight of the shareholders’ meeting on executive remuneration is hollowed out. The Eumedion leader therefore would like to see, among other things, that Trust Offices should no longer be allowed to vote on proposals to amend the remuneration policy and the remuneration report.”
Switzerland
Denmark
  • Reuters reports that Maersk family ousts Danske Bank chairman after scandal: https://www.reuters.com/article/us-danske-bank-moneylaundering-chairman/maersk-family-ousts-danske-bank-chairman-after-scandal-idUSKCN1NB1SL. “Danske Bank’s largest shareholder, the Maersk family, has ousted the lender’s chairman after a money laundering scandal that has also forced out its chief executive. A.P. Moller Holding, which controls about 21 percent of the share capital in the bank, has nominated Karsten Dybvad, who currently heads the Confederation of Danish Industry, to replace Ole Andersen as chairman of Denmark’s largest bank. The move is a rare example of Denmark’s Maersk family, which controls shipping giant A.P. Moller-Maersk through A.P. Moller Holding, openly flexing its muscles to seek change at one of its investments.”  
Norway
Italy
  • Reuters reports that Court rejects Vivendi trust move to suspend Mediaset AGM decisions: https://uk.reuters.com/article/us-mediaset-vivendi/court-rejects-vivendi-trust-request-to-suspend-mediaset-agm-decisions-idUKKCN1NW1SV. “Mediaset said on Tuesday a Milan court had rejected a request to suspend two resolutions passed at its shareholder meeting in June, winning the latest round of a long bout with France’s Vivendi. Mediaset, which is controlled by former prime minister Silvio Berlusconi’s family, is stuck in a legal feud with Vivendi after the French media group pulled the plug on a deal to buy the broadcaster’s pay-TV Premium in 2016.  Vivendi, which declined to comment on the court decision, transferred 19.19 percent of its shareholding in Mediaset to the Simon Fiduciaria trust in April after Italy’s watchdog told it to cut its stake in either Telecom Italia or Mediaset to comply with antitrust regulations.”
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North America
United States
  • Fewer environmental/social shareholder proposals at 2018 annual meetings reflects greater investor influence in negotiations with management, says Georgeson: https://markets.businessinsider.com/news/stocks/fewer-environmental-social-shareholder-proposals-at-2018-annual-meetings-reflects-greater-investor-influence-in-negotiations-with-management-says-georgeson-1027740076. “Investors are having a greater influence on corporate environmental and social (E&S) policies through negotiations with management, resulting in a reduction in confrontational shareholder proposals at 2018 annual meetings, according to a report from Georgeson. In its 2018 Annual Corporate Governance Review, produced in collaboration with Proxy Insight, Georgeson examines corporate governance issues, including shareholder proposals, director elections, say-on-pay and CEO pay ratio disclosure, and shows that fewer E&S shareholder proposals were subject to shareholder votes at S&P 1500 company annual meetings in 2018 than last year (150 compared to 212). Georgeson says that the decrease reflects greater success among investors in using the private ordering process to ensure the publication of corporate E&S information – and predicts greater use of such measures in 2019. ‘Private ordering’ refers to the practices by which corporate governance is agreed between private parties – namely investors and company management – rather than through law or regulation.” See here for Georgeson’s 2018 Annual Corporate Governance Review: https://www.georgeson.com/us/news-insights/annual-corporate-governance-review.

  • Reuters reports that U.S. senators introduce bill to rein-in proxy advisers: https://www.reuters.com/article/usa-senate-sec-idUSL4N1XP5Z7. “Six U.S. senators on Wednesday introduced a bill that would require the U.S. securities watchdog to directly regulate firms like Glass, Lewis & Co and Institutional Shareholder Services, which advise investors on how to vote in corporate elections. The bipartisan bill comes amid a major campaign by the corporate lobby, including the U.S. Chamber of Commerce and the National Association of Manufacturers, to rein-in the ‘proxy advisers,’ which they say have too much sway over corporate democracy. The role of proxy advisers is part of a broader debate over how to improve governance at U.S. companies, which since the financial crisis have faced growing pressure from investors to consider issues like climate change and employee diversity. Proxy advisers often support shareholder proposals on these issues, bringing them into conflict with company management views that the firms are effectively hijacking the boardroom. They say proxy advisers should be regulated in a manner similar to rating agencies.”

  • The Financial Times reports that Investors urge SEC to shake-up US shareholder votes: https://www.ft.com/content/3e483ab8-e46c-11e8-a6e5-792428919cee. “Regulator to examine improvements to the arcane and costly proxy voting system.” Additionally, Cooley LLP’s Cydney Posner published a memo entitled What Happened at the SEC’s Proxy Process Roundtable?: https://corpgov.law.harvard.edu/2018/11/21/what-happened-at-the-secs-proxy-process-roundtable/.  

  • Bloomberg reports that Evelyn Davis, Queen of Shareholder Activism, Dies at 89: https://www.bloomberg.com/news/articles/2018-11-05/evelyn-davis-feisty-queen-of-shareholder-activism-dies-at-89. “Evelyn Y. Davis, the self-proclaimed ‘queen of the corporate jungle’ who turned public companies’ annual meetings into stages for a theatrical, confrontational and self-promoting version of shareholder activism, has died. She was 89. […] Though known as a gadfly, Davis spent decades pressing serious governance issues, advocating term limits for corporate directors, greater disclosure of executive compensation, independence of accountants and scrutiny of legal bills. With a nest egg from her neurologist father, plus income from her quirky annual newsletter, ‘Highlights and Lowlights of Annual Meetings,’ she maintained investments of at least $2,000 – the threshold to offer resolutions – in 80 to 120 companies at any time, and attended as many as 50 meetings a year. In her thick Dutch accent, she held forth at the microphone as chief executives and chairmen had no choice but to listen.”
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Australia
  • ABC opines on the Banking royal commission: Some questions it should ask this week: https://www.abc.net.au/news/2018-11-26/what-the-banking-royal-commission-should-ask-this-week/10550192 “We've heard from some of the top dogs — the chairman and chief executive of Commonwealth Bank, Westpac, Macquarie and the chair of the financial watchdog, the Australian Securities and Investment Commission. They sat in the witness box for an under-oath grilling, then got a barrage of journalists like myself asking them questions when they walked out the door into the Sydney sunshine. They didn't answer.”
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Asia
Japan
Hong Kong
India
  • The Economic Times reports that Sebi forms panel to review rules for proxy advisory companies: https://economictimes.indiatimes.com/markets/stocks/news/sebi-forms-panel-to-review-rules-for-proxy-advisory-companies/articleshow/66726416.cms. “The Securities and Exchange Board of India (Sebi) will carry out a comprehensive review of rules for proxy advisory firms – companies that provide recommendations to institutional investors on whether to vote for a corporate action or not, said two people familiar with the development. The regulator has formed a committee to review the norms which will be headed by Sandeep Parekh, former executive director of Sebi and founder of Finsec Law Advisors. The other professionals in the panel include Ashwani Bhatia, chief executive of SBI Mutual Fund, Monika Halan, consulting editor of Mint and J N Gupta, managing director of Stakeholders Empowerment Services (SES) among others. This is the first such exercise in four years.” 
China
  • Glass Lewis reports about China’s New Governance Code: http://www.glasslewis.com/regime-change-begins-at-home-chinas-new-governance-code/. “That so many blue chip issuers decide to list overseas has raised concerns. China’s economy should continue to produce powerhouse companies. But if the Chinese market can’t overcome its corporate governance weakness, will those powerhouse companies continue to leave for more respected exchanges? These concerns have prompted renewed focus on the country’s regulatory regime. On September 30, the China Securities Regulatory Commission (the CSRC) issued the revised Code of Corporate Governance for Listed Companies. […] Overseas investors should be mindful of state involvement, and the potential for conflicts between the interests of the Party and other stakeholders. Yet while Article 5’s Party building requirements highlight a fundamental difference between how companies operate in China and other markets, most other provisions of the New Code appear focused on improving Chinese regulation to provide flexibility and encourage innovation.”
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Africa
South Africa
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Contact
Daniele Vitale
Georgeson
Corporate Governance Manager > Corporate Advisory
daniele.vitale@georgeson.com
T +44 (0)20 7019 7034 M +44 (0)7747 697 136 F +44 (0)870 702 0158
Moor House, 120 London Wall, London EC2Y 5ET, United Kingdom
www.georgeson.com

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