Thursday, 1 April 2010

Myners update

Since I last posted Paul Myners has been continuing to stir things up. He gave a very interesting speech to the ICGN which I recommend giving a proper read. Notably he told (well, reminded...) investors that that it's entirely within their own power to tackle investment banking fees. It's interesting that the investment industry is very good at warning about the unintended consequences of state intervention, or regulation over self-regulation, when it affects them, but are quite keen on using the state when a different part of the system is in question.

The Treasury has also published all the responses Myners received to his letter out to institutional investors to ask them what they were doing about remuneration at the banks. These are less interesting than I expected, though some people do seem to be thinking a bit differently. I think F&C's response is worth a read (well, they do have quite a big corp gov/SRI team), but I also thought Royal London provided an interesting reply. Wooden spoon must go to Lazards (PDF) - check out the hand-scrawled whinge at the bottom. Financial Muse blog (part of Financial News, the best financial trade mag by far IMO) has already given it a bit of a piss-taking.

Finally, Myners is also quoted in this piece in the Grauniad calling on the FSA to have a look at shareholder engagement. Amen to that. I get the impression that this idea has dawned on a few people of late - where is the corp gov function in the FSA? It really does need some kind of internal resource for these kinds of issues.

In fact the Grauniad article is worth a read as a few interesting comments. Even the one right at the end, which I disagree with, but does at least restate the conventional wisdom:
"The value of a company is directly linked to the performance of managers, whether high or low. If the share price is languishing, that surely tells you that management aren't doing a good job."

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