Professor Geoffrey Kiel is a Specialist Advisor and James Beck is Managing Director at Effective Governance Pty Ltd. This post is based on an Effective Governance publication by Prof. Kiel and Mr. Beck.
Annual board evaluations are now commonplace for both for-profit and non-profit organizations, with specific board evaluation recommendations forming a key component in nearly every major corporate governance standard, review or report internationally.
Recent data on US boards from the global consulting firm Spencer Stuart shows that 98% of S&P 500 boards conduct a board evaluation of some type, although only about a third review the board as a whole, individual directors and committees as part of the process. [1] In the UK, the majority of boards on the FTSE 150 conduct board reviews, with 60.7% conducting their evaluations internally, while 38% of boards used an external facilitator. [2] Encouragingly, PwC reports that in 2017 68% of public company directors in the US say that the board has taken action based on the results of their last board review, which was an increase on the 49% from PwC’s survey in 2016. [3]
CII Comment Letter to MSCI On Unequal Voting Structures
More from: Ken Bertsch, Council of Institutional Investors
Ken Bertsch is Executive Director at the Council of Institutional Investors (CII). This post is based on a letter from CII to the MSCI Equity Index Committee.
Related research from the Program on Corporate Governance includes The Untenable Case for Perpetual Dual-Class Stock (discussed on the Forum here) and The Perils of Small-Minority Controllers (discussed on the Forum here), both by Lucian Bebchuk and Kobi Kastiel.
May 9, 2018
MSCI Equity Index Committee
7 World Trade Center
250 Greenwich Street
New York, NY 10007
Dear Members of the MSCI Equity Index Committee:
I am writing in response to MSCI’s Consultation on the Treatment of Unequal Voting Structures in the MSCI Equity Indexes (Expanded Consultation), which generally contemplates incorporating the proportion of total voting power in the hands of non-strategic shareholders of listed securities into each security’s float-adjusted market cap contribution to MSCI’s developed and emerging market indexes. I want to compliment MSCI on the care and thought it has brought to this proposal.
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