Exec Pay: no point holding 'discussions'

When it is reported that (UK) fund managers 'target bankers' pay' we doubt the effectiveness of this kind of discreet fireside chat (that also creates a conflict of interest as the participants gain access to information that normal shareholders never will see). The article highlights the key problem with corporate governance - in the UK and even more so worldwide. There is plenty of analysis (Reports, Conferences etc) but very little action. And what action there is is missing the target - by a mile! What is the point of having secret 'discussions' with management or the board. Shareholders OWN the companies, these people are their employees and not some feudal lord who graciously agrees to listen to the complaints of his subjects. Most companies are controlled indirectly - via the fiduciaries of the real investors, i.e. fund management companies, private banks, pension funds and insurance companies. It is they who need to be brought under stricter control and be subjected to a code of conduct that leaves no wiggle room. This should not be that difficult as the business is highly concentrated among a list of 40-50 institutions globally who control a large proportion of all listed companies (and also the misnamed 'private' equity industry that is mainly staked by the same pools of money).
(26/11/2011)

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