Thursday, August 19, 2004

CG analytics, proxy voting and restoring investors trust

Worldwide, institutional investors are gradually becoming more active in monitoring and interfering on C. strategy, policy, and major decisions taken by management.
I would like to point to two important but often overlooked enabling components of this monitoring process and of the CG dialogue. Electronic proxy voting by pension funds, mutual funds and alike, is recently being combined with the use of CG analytics tools and software, providing electronically calculated quotients that indicate the quality of G. in a corporation.
The organizations that use these tools, institutional investors, have a natural long-term perspective towards investing and value creation. 10 years or more is normal.
I believe the combination of these factors will over time play out to have been as relevant to restoring investors trust as Sarbanes-Oxley, accounting restructuring or in fact any other measure being taken, because they increase and restore the influence and power of the shareholders. Institutional investors are ideally suited to increasingly play this important task, because they are professionally educated investors, have a natural long term view towards value creation, and they can also represent and balance out the interests of the stakeholder categories they represent. In the case of pension funds: the employees. After all, it's their pensions that must be ensured.

1 Comments:

Anonymous Anonymous said...

I agree with MLOGS that institutional investors are well suited to monitor optimal shareholder value creation. A good document on Proxy Voting can be found on the website of CALPERS: http://www.calpers-governance.org/principles/global/globalvoting.pdf

3:10 PM  

Post a Comment

Corporate Governance Forum