Skip to content

29 January, 2023

Subscribe Advertise About Us
  • My Account
  • Register
  • Log In
  • Log Out

Board Agenda

  • Governance
  • Strategy
  • Risk
  • Ethics
  • News
    • Categories

      • View All
      • Board Moves
    • stakeholder governance

      Threat to stakeholder governance from Twitter sale ‘overstated’

      Academics and experts argue stakeholder governance will always come second while the law puts the...

    • Davos resilience News round-up: this week in governance

      Lessons from Davos; companies risk sliding back on ethical practices; economics affects everyone; Sir John...

    • audit reform UK Audit reform in the UK risks ‘losing momentum’

      The Financial Reporting Council still awaits the proposed new statutory powers that would allow it...

  • Insight
    • Categories

      • View all
      • Governance
      • Strategy
      • Risk
      • Ethics
      • Board Expertise
      • finance
      • Technology
    • climate litigation

      Climate litigation: how 2022 will shape 2023

      This past year saw a rise in climate litigation, with a focus on the commercial...

    • value whistleblowing

      Why we need to value whistleblowing

      Encouraging staff to speak up and stop harm can reduce legal and reputational risk—both for...

    • HR corporate trust

      HR: How to build employee trust in corporate culture

      The right HR director is essential to lead on a culture that gets the best...

  • Comment
      • View all
    • A week of business moving to the centre of human rights

      A week of events signals the initiatives underway to have companies play a central role...

    • audit reform IIA Why we need audit reform right now

      There is an "urgent need" for reform to the audit landscape as well as internal...

    • climate change energy crisis Sustainability and climate change: the other energy crisis

      The world is addicted to cheap energy. We need to admit this and have the...

  • Interviews
      • View All Interviews
      • Podcasts
      • Webinars
    • Board priorities 2023 Board priorities 2023: tact, trust and transparency

      We asked key figures what would help boards this year. The answers ranged from 'smarter...

    • Group of investors/shareholders in glass building Climate issues likely to figure prominently at next year’s AGMs

      A recent webinar heard that say-on-climate voting is expected to rise, while ESG remains a...

    • NEDs role NEDs ‘needed more than ever’ in times of uncertainty

      The non-executive director’s role is to both challenge and listen to management, agreed the panel...

  • Careers
      • View all
      • Selection
      • Board Moves
    • NED recruitment News round-up: this week in governance

      Your country needs NEDs; governance does not compute; financial firms get more women on board;...

    • HR corporate trust HR: How to build employee trust in corporate culture

      The right HR director is essential to lead on a culture that gets the best...

    • powerful CEOs Boards want powerful CEOs in tough times

      Single-minded chief executives have greater staying ability when business conditions are uncertain, research finds

  • Resource Centre
      • White Paper Downloads
      • Book Reviews
      • Corporate & Advisory Services
    • Edelman Trust Barometer 2023

      2023 Edelman Trust Barometer

      The report is the result of the Edelman Trust Institute's research, which sampled more than...

    • Sophos 2023 Threat Report

      Barriers to entry for would-be cybercriminals are lower, with tools and tactics becoming available to...

    • The C-Suite Outlook 2023: On the Edge

      The Conference Board 2023 C-Suite Outlook survey reveals the events that C-suite executives see as...

  • Events
  • Search by topic
    • Governance
    • Strategy
    • Risk
    • Ethics
    • Regulation
    • ESG
    • Investor Relations
    • Selection
    • Board Expertise
    • finance
    • Technology

Easing rules for sovereign-controlled listings ‘detrimental’ to governance

by Kevin Reed on August 2, 2017 in association with

UK plans to free up listing rules to attract sovereign-controlled companies could have a detrimental impact on the region’s reputation for sound corporate governance, warns the Institute of Directors.

Institute of Directors, IoD

Photo: Shutterstock

Plans to open up UK listing rules to attract sovereign-controlled companies are “opportunistic” and “could exert a detrimental impact” on its reputation for sound corporate governance, the Institute of Directors (IoD) has warned.

In a strongly-worded submission to the Financial Conduct Authority’s consultation on creating a premium listing category for sovereign-controlled companies, the IoD flagged up the potential risk for state-run interference over these companies. It has not only called on the authority to reconsider its plans, but to strengthen them.

“We have no objection to the creation of a new sub-set of the premium listing category for sovereign-controlled companies,”said Stephen Martin, director general of the IoD. “However, the proposed rule changes for the new premium listed category are unjustified and could create governance problems.

“At best, they are changes that have been formulated without regard to available evidence concerning state-owned or state-controlled enterprises.

“At worst, they could be interpreted as an opportunistic attempt at boosting short-term primary issuance which ignores the longer-term implications for the overall UK corporate governance regime.”

In its submission, the IoD also highlighted the different types of corporate governance “challenges” identified by previous OECD guidance by sovereign-controlled companies, which includes:

  • The potential for undue hands-on and politically motivated ownership interference over the company by the state apparatus, leading to unclear lines of responsibility, a lack of accountability and efficiency losses;
  • The state authorities may demand that the company fulfils public policy objectives as well as its commercial activities; and
  • Two key sources of private sector corporate discipline—the possibility of takeover and bankruptcy—are likely to be minimal or absent in state-controlled entities.

“We do not understand how removing these rules for, specifically, sovereign-controlled companies can be justified,” Dr Roger Barker, head of corporate governance at the IoD, stated in its submission. “In our view, the need for such checks and balances on controlling shareholder power are as great, if not greater, in cases where the controlling shareholder is a nation state rather than a private person.

“If the UK wishes to encourage state-controlled enterprises to list on the London market, it is important that its listing regime is tailored to address—to some degree at least—these kinds of governance risks and challenges.”

  • Facebook
  • Twitter
  • Google+
  • LinkedIn
  • Mail

Related Posts

  • EuropeanIssuers calls for EU law to apply to 'third country' companies
    December 17, 2021
    EU flag

    The proposal raises the possibility of the Corporate Sustainability Reporting Directive being applied to UK firms trading online in the EU.

  • Are UK corporate governance rules leading to market malaise?
    January 14, 2022
    Share listings board

    A recent article argued the UK needs "more directors who understand risk-taking, not virtue signalling" if London is to regain its status.

  • How to build strong governance ahead of an initial public offering
    November 22, 2021
    IPO on stock ticker

    An IPO sees a company open itself to the scrutiny of thousands of investors. A strong governance structure is essential to minimise risks.

  • In extreme times, we need new priorities for corporate governance
    September 29, 2021
    People meeting in front of a green cityscape

    Corporate governance that prioritises shareholder profit maximisation is no longer adequate in light of the challenges that society faces.

For thoughtful journalism, expert insights on corporate governance and an extensive library of reports, guides and tools to help boards and directors navigate the complexities of their roles, subscribe to Board Agenda

corporate governance, Dr Roger Barker, Financial Conduct Authority, Institute of Directors, listing rules, sovereign-controlled companies, State owned enterprises, Stephen Martin

Search


Sign up to our Newsletter

Receive independent news, thoughtful journalism & expert insights about leadership, corporate governance & key boardroom issues straight to your inbox every week.

SIGN UP

Follow Us

 

 

 

 

Most Popular

  • Audit reform in the UK risks ‘losing momentum’
  • Activist investor campaigns rise back up to pre-Covid levels
  • How to ensure stakeholders trust your sustainability reporting
  • Elon Musk weighs in against ISS and Glass Lewis
  • Climate litigation: how 2022 will shape 2023
 

Featured Partner Profile

Diligent

Diligent

Diligent Corporation, which was founded in 2001, is headquartered in New York, NY with a European HQ in London. Diligent’s modern governance platform empowers leaders and teams at every level of the organisation to digitally transform and create ...

Featured Partner Resources

2022 AGM Season Forecast: An Eye on The Horizon

To help prepare for AGMs in 2022, Equiniti (EQ) hi...

Stakeholder Engagement: A Roadmap for UK Plc Boards

This guide aims to provide directors and their col...

Digital Boards: How Technology Adoption is Driving Culture Change and Resiliency

Digital tools proved their worth to boards during ...
Leadership in AI report

Leadership in AI

This report from Board Agenda and Mazars, in assoc...
Creativity in a Crisis: a Boardroom Map for Innovation

Creativity in a Crisis: a Boardroom Map for Innovation

In the uncertain times at the height of any crisis...
Board Directors Guide to D&O Liability Insurance - November 2020 - AIG & Board Agenda

Board Directors' Guide to D&O Liability Insurance

Directors face liability over a range of new threa...
Leadership-in-Risk-Management-Board-Report

Leadership in Risk Management: Board Report

Board Agenda, in association with Mazars and INSEA...
Director's Guide to Internal Investigations

A Director's Guide to Conducting Internal Investigations

An internal investigation must be handled meticulo...

 


 

ADVERTISE – FREE CORPORATE LISTING

FREE - Add your company profile to our Corporate & Advisory Directory.
ADD

ADVERTISE – PROMOTE YOUR REPORTS & WHITEPAPERS

FREE - Add your company profile to our Corporate & Advisory Directory.
Add Resource

Register Free

Register to receive free article views, selected resource downloads, and all the latest news alerts straight to your inbox. Register


  • Editors & Contributors
  • Editorial Advisory Board
  • Corporate & Advisory Services
  • Media Marketing Solutions
  • Contact Us
  • Careers
  • Board Director Network
  • Terms & Conditions
  • Privacy Policy
  • Cookies
  • Sitemap
|