G20 Leaders Pushed to Fight for Shareholder Rights

(June 28, 2010) — Following the global financial crisis, G20 leaders have been urged to strengthen shareholder rights.

In letters to Canadian Prime Minister Stephen Harper and Chung Un-Chan, prime minister of South Korea, the International Corporate Governance Network (ICGN) said improved global shareholder rights must be part of the solution to the global financial crisis. The group encouraged G20 leaders to recognize the major role of institutional investors in financial market reform.

The ICGN urged its membership of global investors, with $9.5 trillion (€7.7trn) in assets, to raise the bar on their ownership responsibilities following the banking crisis. The undertaken initiatives includes a revision of the ICGN Global Corporate Governance Principles to include an additional section on the responsibilities of shareholders. “Institutional investors can be an effective resource for better regulation of the financial system and we wish to have a constructive dialogue with G20 leaders on current policy issues,” said ICGN Executive Director Carl Rosen in a statement.

“For the accountability chain to work, shareholders must both have rights and exercise them responsibly,” wrote ICGN chairman Christianna Wood in a letter obtained by ai5000. “In jurisdictions where rights are weak, they should be strengthened. In all jurisdictions, shareholders must be encouraged to exercise their rights responsibly.”

CGN executive director Carl Rosen added: “The oversight of a robust banking industry is not, and should not be, restricted to regulators and legislators – investors in financial institutions also have a significant role to play and can be very influential in holding management to account.”

Toronto, Canada, hosted the G20 summit over the weekend. South Korea chairs the G20 in 2010.