Investors want to talk about risk, not performance

Author: Danielle Myles | Published: 18 Nov 2015

There’s a growing disconnect between the corporate governance issues that public companies and their shareholders want to discuss, a survey of investment managers released on Monday has revealed.

The biggest discrepancy relates to risk management, including cybersecurity. Ninety percent of respondents cited this as a priority for engagement, compared to just 30% of boards.

Findings from capital markets intelligence firm CMi2i’s report suggest that company valuations are becoming less quantitative and more qualitative; and that boards must radically rethink how, and on what issues, they engage with shareholders.

"Corporate governance teams are saying they are very concerned about cybersecurity, and want to talk more about processes, protocols and the risk management in place for that," said CMi2i managing director Scott Fulton. "But they say that instead, a lot of companies are still wanting to talk about remuneration and how they have grown their earnings per share."...