Towards a “Mutual Understanding of Objectives”? Attitudes of institutional investors and listed companies to corporate governance reform

The Combined Code looked to companies and institutional investors “to enter into a dialogue ... based on a mutual understanding of objectives.” This paper summarises findings from a survey looking into attitudes of each of these groups towards governance reform. It finds significant differences of opinion between them. The paper notes that there are few differences of opinion amongst the various different sized investors, suggesting that size, of itself, is not an important determinant of investor opinion. Larger companies are found to be more sympathetic towards the reforms of the past decade, whilst smaller companies appear to place less emphasis on governance structure as a determinant of success and seem to have less favourable experience of institutional investors.