Institutional investors have an obligation, on behalf of their clients, to monitor the corporate governance arrangements of those companies in whose securities clients are invested and IAIM has a strong interest interest in supporting governance standards in the Irish market on behalf of our members and their client.
Corporate governance is multi-faceted in nature and encompasses company law, the regulatory framework, the Listing Rules, the Combined Code on Corporate Governance (the ‘Code’), ethical standards, corporate strategy and government policy. Clearly, failure in any one of these areas will impact on the perception of corporate governance standards and for the listed company sector, Ireland follows best international practice by requiring Irish listed companies to apply the Combined Code.
For firms whose securities are primarily, or significantly, traded on Irish regulated markets the Association monitors general compliance with international best practice. This is achieved principally through reviews, jointly conducted with the Irish Stock Exchange, of compliance with international standards. The last full review was conducted in 2010 (see report below). Institutional investors are obliged to raise governance concerns with the boards of listed companies. Where their concerns have not been satisfactorily addressed investors may collectively act to raise concerns of a governance nature. IAIM provides that forum for investors in Irish listed companies.
Executive compensation including share based remuneration is of particular interest, from a governance perspective, to investors. The Association produces guidelines for Remuneration Committees in the design of remuneration policies. In view of the relatively small number of companies whose shares are primarily traded on the Dublin market, IAIM encourages companies to consult with our members prior to commencing the design of revised remuneration structures. IAIM also sets out guidance for companies on the acceptable approaches to the disapplication of pre-emption rights.
Joint Report on Compliance with the Combined Code, Irish Stock Exchange and Irish Association of Investment Managers, 2010. Download full report...