Our Mission is to campaign for the protection of investors and savers by promoting good corporate governance. We also believe that the wider spread of share ownership is in itself a public good and may sometimes even be preferable to higher economic efficiency
April 08, 2015
Shell to buy BG for $70 billion
Headlines such as these demonstrate what is wrong with corporate governance. It may just be that keen journalists present the takeover/merger as a fait accompli - we all know that the shareholders of both companies will still be asked to approve the deal. But apart from the dubious practice of break-up fees the gist of the sentence is that this is a done deal agreed by a quasi-feudal caste of senior managers and their poodle boards over the heads of shareholders and employees. The correct way would be to consult the stakeholders from the beginning, working out the pros and cons of various options (should the del be done, why? what are the benefits) and then putting the options to a shareholder vote. Expensive consultants should be kept at bay and costs scrutinised carefully.