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Restructuring Corporate Governance: The New European Agenda
Which Model Works Better? Contrasting Anglo-American and European
Models
Guy R Jubb
Investment Director, Head of Corporate Governance
Standard Life Investments
Oxford
4 March 2005
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• The myths of models
– does the Anglo-American model exist?
– does the European model exist?
• Institutional investors: pivotal players
– the gate-keepers of the governance chain
– different strokes for different investors
• Engagement: the key to the codes
– contrasting engagement styles Anglo/American/European
– role of representative bodies
“There is no such thing as the Anglo-American model”
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• Models are a myriad of complex chains
– basic governance chain
– complex governance chain
– different chains in different jurisdictions
– different chains in the same jurisdiction
• Chains have same beginning and same end
– you and me: are we the weakest link?
– shareholder associations
• Governance DNA
– each company has a unique governance DNA
– DNA determines culture and style
– DNA chain only as strong as weakest link
“We are all part of the DNA”
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• Policy engagement and corporate engagement
– lobbying on policy: government, media
– proactive corporate engagement
– reactive corporate engagement
• Touch and twist the chain
– US: litigious, confrontational eg Walt Disney
– UK: influential pressure points eg remuneration
– Europe: friends of the family eg Telecom Italia
• Going global brings challenges
– influence diluted
– co-ordination difficult
– cost and scale
– playing away from home
– US v Europe v UK
“Institutional investors can control the chain”
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• Comply and explain
– UK – generally accepted
– Europe – gaining momentum
– US – law and regulation
• Good communication aligns chains
– UK: governance communication channels now established
– US: regulation FD is a big barrier
– Europe: breaking the ice
“Policy makers should pay much more attention to the communicative aspects of corporate governance”
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• Representative bodies: strength or weakness?
– US: CII, NACD, Conference Board
– UK: ABI, NAPF, Corporate Governance Forum
– Europe: Brussels focus, Private investor bodies
• It takes two to tango
– attitudes need to be in tune
– matchmakers wanted
– the tone from the top
“Policy makers should pay much more attention to the communicative aspects of corporate governance”
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• Governance chains are the reality
– governance models are a myth
• Investors not companies should control the chains
– spotlight moving down the chain
• Policy-makers must be communication catalysts
– policymakers can be pacemakers
“Oxford, we have a solution”
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2005 Standard Life Investments
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