Best Practice and Policy Work

books[1]PNO Media, together with EOS, promotes its clients interests as equity owners by contributing to the formation of public policy in relevant areas. It generally does not get involved in public campaigns, but rather aims to offer informed opinions and useful input into groups charged with policy creation and looks to promote best practice through those markets where it has not yet been established. A selection of EOS and PNO Media’s activities in this area undertaken during the second quarter of 2009 are highlighted below.

PNO Media, through EOS, is an active participant at the regular meetings of the Eumedion Investment Committee, the leading Dutch corporate governance forum. The second quarter is traditionally the busiest voting season in Europe and internationally, and in this past quarter the forum addressed voting issues of specific concern for institutional investors. In particular, remuneration packages  and supporting government representatives standing for election at companies which have received state support were discussed this quarter.

EOS and PNO Media responded to a proposal by the NBK [the Swedish Industry and Commerce Stock Exchange Committee] about new rules concerning takeover bids relating to Swedish companies. They welcomed the changes which come in response to calls from institutional investors for fair treatment between different classes of shareholder in takeover situations.

Also during the second quarter of 2009, EOS and PNO Media sought to have input into the European discussions on the ways forward on financial sector regulation through two routes: one through the UK Treasury’s Wholesale Market’s Forum; and secondly through the representative organisations for smaller quoted companies, the QCA and European Issuers. EOS and PNO Media discussed ways to ensure that any overarching EU regulatory structures do not become politicised and instead add value to the supervisory process rather than getting in the way.

In South Korea, EOS and PNO Media held meetings with the Financial Supervisory Service – the main Korean regulator – and with the Korean Ministry of Finance and Economy to press for better pre-emption rights for shareholders. Pre-emption has become a key issue in the country during this AGM season because of changes to companies’ articles which open the door to very significant dilution of existing shareholders. EOS and PNO Media had opposed many resolutions at local companies as a result and have therefore asked both organisations to consider the possibility of regulatory change as a result.