Investors indifferent to corporate governance issues
Australian investors are becoming dangerously indifferent to the value of good corporate governance.
That is the analysis of the adviser on governance issues to the Australian Institute of Superannuation Trustees (AIST), Dean Paatsch, who said too much money was being directed to "sell side" ratings houses and not enough to "down side" research.
Addressing an AIST conference, he said that there was not enough resourcing for governance research, which was being undertaken by just a handful of people.
Paatsch cited a number of examples of recent corporate deals in Australia where he believed not enough attention had been paid to down side issues.
One of those deals was Seven’s acquisition of WesTrac, which he described as both "weird" and "strange".
Paatsch said that "sell side" analysts had backed the deal even though, in private, many had expressed their reservations.
He said it was all too difficult to find people willing to stand up and get rid of bad boards.
"Too frequently no one stands up for shareholders," Paatsch said.
AUTHOR
Mike Taylor
Recommended for you
The FSCP has announced its latest verdict, suspending an adviser’s registration for failing to comply with his obligations when providing advice to three clients.
Having sold Madison to Infocus earlier this year, Clime has now set up a new financial advice licensee with eight advisers.
With licensees such as Insignia looking to AI for advice efficiencies, they are being urged to write clear AI policies as soon as possible to prevent a “Wild West” of providers being used by their practices.
Iress has revealed the number of clients per adviser that top advice firms serve, as well as how many client meetings they conduct each week.
