Not in the City

As we all know, senior figures in the City have been worried that the market for London listings is in decline. So much so, in fact, that London Stock Exchange (LSE) boss Julia Hoggett has spent the best part of two years persuading policymakers the UK needs to cut back on regulation and governance.

These efforts have not been enough for some companies, who made headlines with news that will no doubt form another blow to City pride.

The board of mining giant Rio Tinto is under pressure from activists Palliser Capital to end the company’s primary listing in London and shift entirely to Australia’s stock exchange.

The Times reports Palliser having calculated that the company’s current dual listing has “wiped” £50bn in value from the company.

Elsewhere, The Times reports that Nik Storonsky, co-founder and chief executive of star fintech outfit Revolut, declared a London listing was “not rational”.

Storonsky told a podcast that London is “much more illiquid, and trading in the US is free”—a reference to stamp duty on shares in the UK, according to The Times.

The news from two high-profile companies will be a blow to the LSE and the chancellor, who recently offered her personal backing to City reforms that eased regulation on dual class shares.

Apologies to The Clash but, sad to say, London is not calling.

US needs closure on disclosure

Corporate disclosure enthusiasts will know that the EU has set in motion the Corporate Sustainability Reporting Directive (CSRD), a vast cornucopia of new rules on non-financial reporting.

Recently, the news has been about whether the whole CSRD reporting drive has gone too far, after former European Central Bank chief Mario Draghi said just that in a report on the competitiveness of the EU.

US business mag Forbes is unmoved and, this week, warned US companies with EU operations that they had better get moving if they want to avoid non-compliance with the EU’s shiny new piece of corporate rule making. “By positioning themselves as leaders in ESG reporting, companies can weather regulatory pressure while driving sustainable success in the evolving global marketplace,” Forbes concludes.

That’s all sound advice, but Board Agenda would like to pause for a moment to observe one irony: the US regulator, the SEC, was recently forced to suspend introduction of its own mandatory climate-risk reporting regs, regs that are almost certainly dead in the water once Donald Trump is inaugurated (again) as president in January. The Republican Party doesn’t like ESG or sustainability or any of that there “woke mind disease” stuff.

And yet, there’s no escaping it, if US companies want to do business in the EU, they’ll have to do some pretty extensive sustainability reporting, like it or not. So, better to like it, whatever POTUS yells.

Billionaire boy

Elon Musk was distracted from his new job of downsizing the US Federal government when a Delaware judge this week upheld a January ruling on appeal that the tech bro/auto trader/rocket man/social media addict couldn’t have his $56bn pay bonanza for running Tesla.

Of course, the fanboys were out in force, claiming foul, but more considered minds were less impressed with Musk’s histrionics.

Ohio’s Case Western Reserve School of Law prof Anat Alon-Beck writes for Bloomberg that the court upheld the fact that the process of granting Musk his unimaginable wad was far from impartial and “marred by inadequate disclosures”.

“This case is a cautionary tale for boards navigating high-stake executive compensation,” she writes. “Procedural missteps, inadequate disclosures, and after-the-fact ratifications undermine trust and judicial respect.

“As Delaware remains the gold standard in corporate governance, the ruling illustrates the importance of aligning leadership incentives with governance best practices.”

Put that in your drive chain and smoke it.