By ELLEN READ
Directors of listed companies should disclose how they vote on key resolutions, says Stock Exchange chief executive Mark Weldon.
Speaking to the Shareholders' Association in Auckland on Wednesday night, Weldon said he was not suggesting directors disclose every minor decision, just those in which shareholders also had a
say.
"There's also a case for putting pressure on institutions to disclose their voting and on proxy holders," he said.
Citing the California Public Employees' Retirement System, Calpers (www.calpers.com), which not only discloses how it votes but also rates the corporate governance of its investments, Weldon supported association chairman Bruce Sheppard's call for a scorecard for directors.
Sheppard is an advocate of a directors' register which compiles voting records and lists directors found guilty of corporate misdemeanours.
Weldon said the relationship between shareholders and directors should be given more prominence not only in times of crisis but on an ongoing basis.
This fits with his explanation of the new corporate governance the exchange imposed three months ago - that he wants to encourage an environment of communication and information sharing as opposed to rigidly demanding every piece of paper which passes the company's desk.
"What the companies and directors need to think about is what information do investors need."
He brushed aside suggestions that directors may simply say that board decisions were unanimous, saying this in itself should be questioned.
"What makes boards great? Them not necessarily getting along very well," Weldon said, explaining that a lack of consensus showed ideas were being tested.
Companies needed to consider not only the knowledge base of the directors but also the mix of people on their boards, he said.
As part of a drive to make more information available on public companies, the exchange is looking at the way companies report.
More information was likely to be required because the Stock Exchange had a responsibility to build up a public information set, Weldon said.
