The European Commission is reviewing whether institutional investors should disclose share voting practices, adhere to “stewardship codes” of best practice and disclose how they pay intermediaries, such as money managers, according to a consultation started Thursday.
The EC wants to know whether shareholders can help control risk-taking by banks and insurance companies, and, if so, how best to get them to exercise their rights and responsibilities as shareholders of those companies, according to the consultation document.
The document asks institutional investors for responses to such questions as: “Should disclosure of institutional investors' voting practices and policies be compulsory? How often?” and “Should institutional investors be obliged to adhere to a code of best practice (national or international) such as, for example, the code of the International Corporate Governance Network?”
The consultation is part of a larger reform of European financial regulations that is under way.
“I am convinced that true crisis prevention starts from within companies,” Michel Barnier, EC internal market and services commissioner, said in a news release. “If we are to prevent future crises, financial institutions themselves need to change.”
The consultation document is available at http://ec.europa.eu/internal_market/company/modern/corporate_governance_in_financial_institutions_en.htm. Responses to questions asked in the document should be sent by e-mail to [email protected]