SWEDEN - Corporate governance has come under the spotlight in Sweden as well as the UK.
AP2, the Second Swedish National Pension Fund, is charting the representation of women on the boards of Swedish companies, while in the UK a government-sponsored report from former investment banker Derek Higgs has recommended a shake up in the composition of company boards.
AP2 has established an index, to be updated annually, which will record how the proportion of female company directors varies over time.
Just 7.3% of board members of the 297 companies listed on the OM Stockholm Stock Exchange at the end of 2002 were female, although women account for half the Swedish population, said AP2. The end of 2002 figures will be used as the base for the index.AP2 has discovered that:
• there are huge differences on representation between different industries. Healthcare, banking, insurance, and pharmaceuticals have the highest proportion of women board members, while oil and gas, computer hardware and forest industries have the lowest.
• different exchange lists have different levels of female representation at board level. The A-list has the highest percentage, Attract 40 the lowest.
• the percentage of women appointed to executive management of companies is much higher than the percentage of women on their boards.
AP2 wants to increase shareholder value by employing the underused skills of women on company boards. It said: “Women account for half the Swedish population, yet few are even considered as prospective candidates to the boards of Sweden’s companies, although many possess several of the qualities and professional skills sought.
“Better boards lead to better companies, which create better shareholder values.”
In the UK, The Non Executive Directors Review by Derek Higgs, commissioned by the government in the wake of the Enron crisis in the US, has advocated a greater role for non executive directors in the management of UK companies.
Higgs’ main recommendation is that at least half of board members should be independent non executives with non management roles, who would represent the interests of shareholders.Other recommendations include:
- a more open, fair and rigorous system for the appointment of non executive directors to widen the pool of candidates;- a clearer description of the role of non-executives;- separation of the role of chairman and chief executive;- improved induction and professional development for directors;- evaluation at least annually of the performance of individual directors and of the board as a whole.
Published alongside the Higgs Review was a report by Sir Robert Smith on the behaviour of audit committees.
The recommendations of the Review have been widely welcomed. UK chancellor of the exchequer Gordon Brown said: “Stronger and more effective boards are essential to continue to raise standards of corporate governance in the UK.
“Hand in hand with the stronger role of institutional investors recommended in the Myners Review, the reforms Derek Higgs and Sir Robert Smith envisage are crucial underpinnings of our ambitions for UK corporate and economic performance and for productivity. The test for government will be the extent to which the business and investment communities rise to the challenge that has been laid down.”
And NAPF chief executive, Christine Farnish, commented: “The Higgs reforms are a significant boost to corporate governance in the UK. Whilst standards in this country are among the highest in the world, there is no room for complacency, and Derek Higgs’s report includes much that will enhance boardroom practices.
“By boosting the role of independent NEDs, the proposals will make UK boardrooms more accountable to investors, and encourage NEDs to ask the sort of challeng
The People's Pension, Atlas Master Trust and The Cheviot Trust have been granted authorisation from The Pensions Regulator (TPR), taking the total number of authorised master trusts to 18.
Pension schemes have been warned they may now face a more challenging legal test if they wish to fix drafting errors.
The Greene King Pension Scheme has appointed XPS Pensions as its actuarial and investment adviser following a competitive tender process.
Professional Pensions has compiled a list charting the progress of master trust authorisation. View our list in full here...