AUM in Action

Investors Warn Against UK Corporate Governance Rollback

The International Corporate Governance Network (ICGN) has flagged global investors’ concerns on regulatory proposals that could weaken UK corporate governance standards and shareholder protections. The ICGN cautioned against the UK Financial Conduct Authority’s proposals to replace the current standard and premium segments with a single listing category. The network said this would remove shareholder votes prior to significant transactions and related party transactions, and allow dual-class shares with “very few investor protection safeguards”. The weakening could both undermine the UK’s economic growth and attractiveness as a global financial centre, as well as expose investors to undue risk, the IGCN added. It potentially also holds significant implications for underlying beneficiaries, including pensioners and insurance, and for retail investors’ savings. “At a time when regulators around the world are encouraging investors to play a greater, more responsible stewardship role in promoting the long-term success of companies, weakening their voting rights will have the opposite effect by inhibiting [their] influence,” said Séverine Neervoort, Global Policy Director at the ICGN. The network is led by investors responsible for approximately US$77 trillion in AUM, and aims to advance the role of corporate governance and investor stewardship in the contribution to sustainable economies and the environment.

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