In today’s briefing:
- Avoid Letting Companies Fall into Formalism by Aligning Evaluation with Investors’ Perspectives
Avoid Letting Companies Fall into Formalism by Aligning Evaluation with Investors’ Perspectives
- Most companies simply tack on criteria related to skills/background to rubber-stamp the composition of current board of directors, and a few disclose explanations of these criteria, scouting or nomination policies.
- To prevent companies from falling into formalism, evaluations should focus first and foremost on whether they have created value, rather than on improvements in corporate governance practices.
- We should not assume that value creation metrics improved simply because board practices improved; rather, companies that have shifted to value-creating management tend to also work on improving board practices.
💡 Before it’s here, it’s on Smartkarma
Sign Up for Free
The Smartkarma Preview Pass is your entry to the Independent Investment Research Network
- ✓ Unlimited Research Summaries
- ✓ Personalised Alerts
- ✓ Custom Watchlists
- ✓ Company Data and News
- ✓ Events & Webinars
