{"id":32728,"date":"2016-02-03T04:51:16","date_gmt":"2016-02-03T03:51:16","guid":{"rendered":"http:\/\/www.w-t-w.org\/en\/?p=32728"},"modified":"2016-02-03T04:58:22","modified_gmt":"2016-02-03T03:58:22","slug":"32728-2","status":"publish","type":"post","link":"https:\/\/www.w-t-w.org\/en\/32728-2\/","title":{"rendered":"Can Public Corporations Come up with Good Governance Proposals?"},"content":{"rendered":"

Stephen Foley \u00a0writes: The world’s largest asset managers have held secret summit meetings to hammer out proposals for improving public company governance to encourage longer-term investment and reduce friction with shareholders.<\/p>\n

Jamie Dimon, chief executive of\u00a0JPMorgan Chase, and\u00a0Warren Buffettconvened the sessions with the heads of\u00a0BlackRock,\u00a0Fidelity, Vanguard and Capital Group to work on a new statement of best practice that would cover the relationship between U.S. companies and their investors.<\/p>\n

The unusual collaboration comes at a time of\u00a0rising shareholder activism\u00a0and a raging debate about whether public markets demand short-term profits at the expense of long-term investment.<\/p>\n

In recent years, some private companies have shunned early public listings, and technology bosses such as\u00a0Michael Dell\u00a0have argued that equity markets are too focused on short-term gains. Some large technology groups have also opted to go public with dual-class share structures that limit shareholder rights in an effort to minimise the influence of activist hedge funds.<\/p>\n

\n
The asset management bosses, including Abby Johnson of Fidelity,Larry Fink<\/a>\u00a0of BlackRock and Tim Armour of Capital Group, met most recently at JPMorgan’s New York headquarters.<\/div>\n
\n

The group is discussing a statement of best practice on corporate governance. Discussions have focused on issues such as the role of board directors, executive compensation, board tenure and shareholder rights, all of which have been flashpoints at U.S. annual meetings.<\/p>\n

Mr. Dimon, in particular, has reason to hope for a rapprochement between boards and long-term shareholders. He has faced personal criticism for combining the role of chairman and chief executive at JPMorgan, and at the company’s last\u00a0two annual meetings, more than a third of its shareholders voted that he should split the roles.<\/p>\n

As well as being a major player in capital markets, JPMorgan also has an asset management arm that is one of the U.S. equity market’s largest investors, with $1.7 trillion in assets. Mr. Buffett, a long-time friend of Mr. Dimon, has eschewed many corporate governance norms at his company,\u00a0Berkshire Hathaway.<\/p>\n<\/div>\n<\/div>\n

\n
\n
Other contributors to the initiative are understood to include Mark Wiseman of the Canada Pension Plan Investment Board and Jeff Ubben of ValueAct, an activist hedge fund manager.<\/div>\n<\/div>\n
\n

No participants agreed to be quoted on the initiative, which is not expected to come to fruition for several months. The asset managers hope to come up with a list of best practices that they will support at the companies they invest in.<\/p>\n

The move comes amid a debate on shareholder rights and responsibilities and on the balance of power between investors, boards and management. Activist hedge funds with more than $100 billion in assets have used their muscle to demand board changes and push companies to increase returns to shareholders, often through share buybacks.<\/p>\n<\/div>\n<\/div>\n

\n
The largest companies typically face a half-dozen or more votes from dissident shareholders at each annual meeting, on topics ranging from executive compensation to environmental policies and political lobbying.<\/div>\n
\n

An increasing number of U.S. companies have also agreed this year to offer long-term shareholders the right to nominate their own candidates for board directors.<\/p>\n<\/div>\n<\/div>\n

\"Jamie<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

Stephen Foley \u00a0writes: The world’s largest asset managers have held secret summit meetings to hammer out proposals for improving public company governance to encourage longer-term investment and reduce friction with shareholders. Jamie Dimon, chief executive of\u00a0JPMorgan Chase, and\u00a0Warren Buffettconvened the … Continue reading →<\/span><\/a><\/p>\n","protected":false},"author":7,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"footnotes":""},"categories":[13],"tags":[],"class_list":["post-32728","post","type-post","status-publish","format-standard","hentry","category-finance"],"aioseo_notices":[],"aioseo_head":"\n\t\t\n\t\n\t\n\t\n\t\n\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t