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Governance experts home in on iX
exchange
The merger of the London and Frankfurt
stock exchange could be a golden opportunity to create better corporate
governance structures, according to specialists.
There are currently large divisions
between markets due to different levels of corporate governance.
The proposed merger of the Frankfurt
and London stock exchange to produce the iX exchange has raised fears that
governance codes developed in London could be watered down (PW
8.5.00).
But Robert Hayim, managing director of
Thomson Financial E-Vote, said London governance policies were not adequate and
there had been problems about enforcement.
He also said : "In Germany the
shareholder structure is very different and there are structural issues to
address. We have got to take the debate forward to make iX better."
Sarah Wilson, managing director of
corporate governance agency Manifest, agreed that structural changes were
needed and is concerned that these have not been addressed in the merger
plans.
She said: 'They only focus on the
shareholders of the stock exchange - they are not focusing on the requirements
of the users of the stock exchange."
Wilson said corporate governance was an
essential part of building investor confidence, but too often it was put low on
the list of priorities or was an afterthought.
However, she believes that developments
such as the corporate governance principles published by the European
Association of Securities Dealers (EASD) earlier this month show that others
across Europe share her concerns.
The EASD said its pan-European
principles and recommendations were part of a drive to confront the legal,
social and cultural differences which confuse investors in Europe's fragmented
market.
Leo Goldschmidt, chairman of EASD's
corporate governance committee, said: "With falling barriers, a Europewide
approach to corporate governance is required. Companies that do not recognise
this will be at a disadvantage."
The principles address issues such as
the protection of rights and fair treatment of shareholders, the provision of
adequate and verified information and the existence of a proper market for
corporate control.
By Karen Talbot, Pensions Week
29th May 2000
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