UK - Companies need to work within parameters of best practice to meet the corporate governance requirements of pension funds, delegate at a recent conference were told.
Cass Business School’s centre for research in corporate governance director George Selim said companies should implement the “spirit” rather than the letter of best practice and avoid simple box-ticking.
Communication with shareholders was seen as crucial with firms urged to use simple, direct and easy to comprehend language and avoid “exotic financial products”.
Speaking at the NAPF’s Corporate Governance conference, Selim said: “Shareholders must demand companies do not try to beautify performance or use complex ways of putting across annual accounts as this allows for exploitation.”
“Not adopting best practice will lead to a negative impact on the company’s credit rating and could lead to challenges of contentious resolutions at AGMs. There may also be management changes imposed on company boards and negative sentiments fuelled by media attacks – which lead to low staff morale and customer loyalty.”
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