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Setting the benchmark in corporate integrity

Redefining corporate responsibility: award winners 2013

Organisations are seeking to correct past workplace models, taking stock and embarking upon a new age of responsibility. Here, the Corporate Governance Report celebrates those firms carrying the governance torch

Jump to the list of winners.

Recent years have seen organisations hone in on corporate governance like never before. Seeing as many believe the fundamental corporate failings of pre-crash to be in part due to poor oversight, corruption and transparency, or lack thereof, this year has given rise to a new era in which good governance is a prerequisite for success.

In recent years organisations have bandied about the idea of ‘good governance’ to such an extent that few can afford to ignore it for fear of being exposed as inadequate. Companies across the globe have sought to appease increasingly demanding shareholders, maintain a merit-based leadership, identify emerging risks, adopt new strategies, and adjust to an evolving regulatory landscape in keeping pace with present-day conditions. This year’s proxy season offers the clearest indication of rapid changes to the corporate space, with those participating demanding that accountability, transparency and oversight be granted due attention in satisfying shareholder expectations.

The first half of 2013 saw proposal submissions increase six percent on last year, according to Ernst & Young, representative of a growing effort among shareholders to have their voice heard. However, more proposals were withdrawn this year compared with 2012 – 30 percent on 26 percent – indicative of a growing readiness among board members to engage with shareholders more than perhaps ever before.

The shareholder perspective
Businesses will certainly be taking note of shareholders in light of an emerging culture of shareholder activism, the likes of which have stifled and spurred a fair degree of change to corporate governance this past year. The FRC’s Corporate Governance Code reads, “There should be a dialogue with shareholders based on the mutual understanding of objectives. The board as a whole has responsibility for ensuring that a satisfactory dialogue with shareholders takes place.

However, 2013 has seen the relationship suffer somewhat as overly zealous shareholders have sought to hold companies accountable for their actions, irrespective of the consequences to business. Such was the case with Bill Ackman, who resigned from JC Penney’s board earlier this year following what was an exemplary example of shareholder activism turned sour. While ‘financial engineering’ has long played a part in the hedge fund market, when Ackman attempted to change the very fabric of Penney’s business in what he termed “an extreme makeover,” the experiment fell flat.

Shareholder activism, however, is far from excluded to institutional shareholders; with a growing number of individuals demanding a greater say in the way in which a company is run. Although affected companies – such as Penney – are often quick to label activist shareholders as interested only in turning a quick profit, it remains the case that shareholder activism has in some cases incited positive changes to corporate governance.

Partner at Cleary Gottlieb Steen & Hamilton, Neil Whoriskey told Financier Worldwide, “the atmosphere in which activists operate has changed substantially over the past few years. Most significantly, institutional investors, some of whom had considered activists to be anathema, are now in general much more willing to listen to and in some cases support activists – and the support has not always been limited to quiet behind the scenes assurances that the institutional investor will vote with the activist.

“I believe this greater willingness to support, or at least hear out, activists arises from two factors – first, the profitable track record of some, though certainly not all, activists; and second, the pressure the good governance types have been placing on large institutional investors to become more actively involved in supervising the management of their portfolio companies.”

Finding a fitting new model
The proposals from this year’s proxy season spanned a wide range of subjects – shareholder activism included – though the top five topics of all submissions pertained to environmental and social issues, with sustainability and non-financial reporting being areas of especial focus.

Following a firm footing in 2012, sustainable reporting is proving increasingly popular among the masses, as many businesses and consumers are growing more aware of the pressing environmental and social issues of today. According to the German research firm Oekom Research AG, while as many as 60 percent of companies are not showing enough commitment to sustainable reporting, there are a select number of firms who are paving the way in terms of CSR disclosure.

The report reads, “Numerous examples from many different industries and companies show that the ideas, concepts and technical capabilities needed to meet the challenges successfully already exist. Environmental and social commitments are not the product of economic success, but rather its root cause.

“Only those who manage energy and raw materials efficiently, treat their own employees and those of their suppliers fairly, and offer products that are tailored to changing market requirements will also be economically successful in the long run. In this sense, sustainability is also described as long-term economics.” Sustainable reporting has, in recent years, served as a vital resource for those interested in the CSR side of business. However 2013 had taken a step further and given rise to a new model of disclosure, which seeks to include non-financial information alongside that of accounts.

One of the most significant regulatory overhauls pertaining to this style of so-called integrated reporting is a European Commission proposal, requiring that large companies – those with over 500 employees – disclose non-financial information in their annual reports. While sustainable and integrated reporting is still early on in its development phase, it is crucial that businesses abide by these developments to not only appease shareholders but to enable markets a greater understanding of the wider changes at hand in business.

The ACCA’s Head of Technical, John Davies told World Finance, “Extensive efforts are being made to encourage investors to use the information they receive to assume a more active role in the governance of their investee companies. There is still a long way to go to make this happen, but it is hoped that the wider range of information now being disclosed by large companies, and the more decision-useful character it is assuming, will prompt continued improvement in the quality of governance and corporate social responsibility.”

Organisations such as the International Integrated Reporting Council (IIRC), a global coalition of regulators, investors and companies, are seeking to develop a common standard by which all companies can uniformly disclose non-financial information. The IIRC published an International Framework for integrated reporting last December, requiring organisations disclose information on strategy, governance and performance in a single consistent format.

The IIRC’s CEO Paul Druckman said to PwC with regards to integrated reporting, “At the board level, organisations have that strategic oversight of their business, but often that integrated thinking and integrated strategy doesn’t come through into the rest of their organisation.”

Diversifying in the boardroom
Boardrooms have suffered a great deal of criticism this past year, particularly with regards to matters of diversity and the perpetuation of group think among its constituents. Being a psychological mind-set that so often strangles diversity, ignores criticism and favours the proverbial ‘yes men’ of the boardroom, group think has become a major adversary of good governance in 2013.

Individuals guilty of this persuasion typically succumb to consensus without due regard for critical evaluation; a state of affairs underpinned by closed-mindedness and illusions of invulnerability. As such, boardroom diversity has emerged as a principal concern for shareholders and businesses alike in 2013, with female participation playing a significant part in rectifying these wrongs.

The ‘women on boards’ debate has gained ground among the masses recently, thrusting the issue into the higher echelons of corporate discussion and prompting some nations to go so far as to implement a quota system – Norway and Spain among them. While gender diversity is a cause that merits support, Melanie Wadsworth, partner at Faegre Baker Daniels and proponent of gender diversity says, “I am increasingly uncomfortable with the narrow, male-versus-female context in which the debate is playing out.

Diversity is not about quotas, but about ensuring that the board has a complementary and balanced set of skills and that all individuals feel able to express their views freely and effectively. The qualities that make up a diverse board are not necessarily male or female. Although a cluster of like-minded, male directors led by a dominant male CEO is one obvious route to ‘group think.’”

The issue of gender diversity is one that raises a disconcerting array of statistics, chief among them being that a mere 4.2 percent of the Fortune 1000 companies had a female CEO as of July last year. The relative absence of women on boards is even worse in Europe, where, according to the European Commission’s ‘Women in Economic Decision Making’ database, women make up a mere 13.7 percent of board members despite 60 percent of EU graduates being female.

Helena Morrissey, CEO of London-based Newton Investment Management and founder of the 30 Percent Club told European CEO: “The current number of women on boards is a global economic problem. A diverse boardroom is good for the overall effectiveness of the boardroom and therefore good for business. By not achieving at least a 30 percent representation of women, companies are missing out on highly skilled, suitable candidates and are in danger of groupthink.

“It’s now acknowledged that boardroom failings significantly contributed to the financial crisis and as a result, chairmen, nominations committees, executive search firms and investors are all reassessing what makes an effective board. A modern successful company needs a board of directors who bring a range of experiences, perspectives and personalities to the table.”

Whether focused on expertise, experience or gender, boardroom diversity will continue to come under close scrutiny provided that it constituents of yesteryear fall foul to group think and an enduring spirit of narrow-mindedness.

While discussions of good governance comedown to transparency and oversight, the root causes of financial fallout lie with the overlooked corporate inadequacies of old. Provided that fundamental issues such as shareholder representation, boardroom diversity and non-financial disclosure are addressed, corporate governance can spur growth in the economies and communities in which organisations not only play a large part but bear a great deal of responsibility for.

We are proud to announce the winners of our Corporate Governance Awards 2013, below.

Alternatively, view the digital edition of the supplement here



National Australia Bank

nabThe National Australia Bank operates across 10 countries around the world. NAB’s Shareholder Centre gives its stakeholders an up-to-date and detailed account of key financial information, as well as presentations and briefings from key personnel on the company’s strategy, keeping all interested parties as up-to-date as possible.


Raiffeisen Bank International AG

One of Austria’s most celebrated banks pursues an innovative approach to transparency, with a dedication to supplying investors, customers and the public with comprehensive analysis of operations. Recognising the formal establishment of the Austrian lobbying system, the firm abides by the nation’s strict obligations.


BBK Bank

One of Bahrain’s leading financial institutions, BBK Bank, has built a corporate governance strategy from the top down. With a clear distinction between the role of chairman and chief executive, the board is made up of a diverse and varied mix of backgrounds, ensuring a variety of interests are met and stakeholders attain the best possible value.


Anheuser-Busch Inbev

ABInbev has long been committed to ensuring it is managed in a responsible and sustainable way. The company’s main corporate governance ethos revolves around the effectiveness and accountability of its board, and it has therefore developed a comprehensive charter that guides all of the board’s activities, without limiting vision or hampering swift action.


CPFL Energia

This Brazilian energy conglomerate has made corporate governance one of its biggest priorities and has long sought to align its practices with the highest global standards of best practice. Its shares are only listed in exchanges with stringent corporate governance guidelines, such as the São Paulo and New York Stock Exchanges.



BCE’s corporate governance strategy sees the communications company exhibiting best-in-class transparency and accountability. The company believes good governance to be at the heart of shareholder value, with management efforts fully focused on this, which is reflected in the corporate structure.



Chile’s largest electric utility company, Santiago-based Endesa has long been committed to good governance. Now in its 70th year, Endesa provides informed analysis about its corporate governance practices, including its human rights policies, compensation procedures and regulations, reflecting a transparent and modern utilities company.


China Resources Enterprise

The consumer-focused conglomerate believes that sound corporate governance and full disclosure are the best mechanisms to serve the interests of stakeholders. In keeping with this ethos, China Resources Enterprise submits a quarterly report that seeks to demonstrate the group’s upstanding internal culture and corporate integrity.


Pacific Rubiales Energy Corporation

One of the fastest-growing petroleum companies in the world, Canada’s Pacific Rubiales Energy is focused primarily on Colombia and Peru. Taking its governance obligations extremely seriously, it complies with the regulations of all the regions it operates in, and is listed on the Canadian, Colombian and Brazilian stock exchanges.

Czech Republic

Telefónica Czech Republic

Telefónica’s continued commitment to the many communities in which it operates is in keeping with the company’s core principles. As a natural extension of its business, Telefónica aims to bring its core values of openness and ethicality to the many markets in which it conducts business.


Novo Nordisk

Pharmaceutical company Novo Nordisk has developed an intricate corporate governance framework which is often reviewed by its board. Denmark has a history of strict corporate guidelines, to which Novo Nordisk fully complies by deciding the control and direction of the company among shareholders, the board and executive management.



With a global network as large as UPM’s, a substantial governance framework is not only paramount for operations, it also becomes an area requiring significant human resources. Guided by the self-governing Biofore strategy, the group’s operations are directed by innovation, development and transparency though 12 principles of responsibility.


Pernod Ricard Group

Shareholder return, consumer protection, and cultural awareness are the key foundations upon which Pernod Ricard is built, and the group delivers on all fronts. Through detailed and continual analysis of strategic suppliers, the group has established an output that stakeholders can rely on.



bmwAn organisation the size of BMW must set outstanding standards across the board, building communication into its very core. BMW has installed active channels of transparency with its stakeholders, and often works with government bodies and academics internationally to commit to and strengthen its sustainability goals.


Magyar Telekom

As a condition of listing on the Budapest Stock Exchange, Magyar Telekom has to ensure it complies with a comprehensive set of regulatory requirements. In the interest of full disclosure, Magyar makes the details of its internal dealings fully transparent on a regular basis to stakeholders.



Customers, employees, investors, vendors and society are the five cornerstones on which Infosys is built. The company conforms to a number of regional standards – including the Euroshareholders Corporate Governance Guidelines and the Conference Board Commission on Public Trusts and Private Enterprises – going one further to ensure stakeholders are involved in a responsible and responsive organisation.


PT Bank Mandiri

Created through the merging of four state-owned banks, PT Bank Mandiri has a combined history of over 140 years. The bank has worked to ensure shareholders and customers have trust in the way it works, and has a Good Corporate Governance Committee that overseas its practices, instilling strong values by internalising the goals of improved transparency.



Formed through a merger in 1970 of two leading Irish public companies, CRH is now an international group of building materials businesses, which underpin much of the global construction industry. CRH is widely recognised as adhering to international principles of good corporate governance.



Enel’s governance directives provide direction for the firm that successfully promotes responsible management systems, while attempting to create short and long-term shareholder value. Closely aligned to the Corporate Governance Code, the rules are entrenched in the firm’s ongoing operations throughout the entirety of the group.


Bank Audi

Part of the Audi Saradar Group, Lebanon’s Bank Audi is the country’s largest and oldest bank, having been founded in 1830. The company’s corporate governance framework has been updated recently to fit with international regulatory standards, and a 12-member board is elected every three years to oversee the continued success of the bank.


Sime Darby

sime-darbyMaintaining a clear strategy and governance etiquette can be challenging for large organisations, but Sime Darby is celebrated for its clarity of vision, accountability, and structure. With a resolute ethos of maintaining both good communication and corporate responsibility, the group’s affairs are kept in good order, ensuring clear governance reportage.


RS2 Software

One of Malta’s leading software development outfits is fully self-aware, making use of audit and remuneration committees while employing a ‘big four’ auditor to fully regulate operations. Internally, the firm encourages both formal and informal communication between departments in order to improve systems and administration.



This food production group holds strong corporate governance practices. It is concerned with the well-being of its shareholders, particularly when it comes to transparent financial disclosure. Its Corporate Governance Committee applies systems of internal control which include the maintenance of proper accounting.


Controladora Comercial Mexicana

This traditional Mexican institution has adopted a robust framework of corporate governance and reporting. Operating in the retail sector, the Controladora Comercial Mexicana has a Code of Ethics, and a Code of Best Corporate Governance Practices that supplement its by-laws in order to ensure the highest standards of practice are adhered to at all times.


Royal Dutch Shell

Royal Dutch Shell – one of the world’s most valuable companies – has an impressive track record when it comes to good governance. It has focused on being upfront and transparent in the way it operates, with a clear code of conduct and ethics. It is also committed to the strict governance standards laid down by the New York Stock Exchange


Zenith Bank

Zenith Bank is a major player in Nigeria’s financial sector, and realises the importance of maintaining a fully transparent operation. The company offers a comprehensive set of information for shareholders, as well as holding regular forums between shareholders and its investor relations unit.



Fully compliant with the Norwegian Corporate Governance Board, Storebrand prides itself on its longstanding and productive dialogue with stakeholders. In 2006, the firm established an in-house corporate governance committee, which ensures unparalleled standards throughout the group.


Bank Muscat

Operating with a tried-and-tested functional structure, the bank maintains cross-departmental communications through a unique approach that breaks through organisational barriers. This is reflected in the company’s external disclosure policies, which aim to highlight its pioneering financial makeup.


Ayala Corporation

The principal duties of directors at Ayala Corporation are carefully laid out, and are protected by the corporation’s bylaws and Manual of Corporate Governance. As a result, the company has made a conscious effort to improve and secure stockholders’ rights, and promotes its participation in the CSR process.



The Warsaw-based media company reserves special attention for the importance of good governance, best evidenced by its daily checks to ensure it adheres to its Code of Best Practice. Agora displays a great deal of respect for shareholders recognising their place in the continued success of the business.



Although Inapa represents various cultural and legal backgrounds, the company’s outstanding approach to conducting responsible business is uniform. The business considers social and environmental factors to be key in building a balanced future for the various industries in which it plays a part.


Qatar Foundation

qatar-foundationThe Qatar Foundation is extremely community-focused. The foundation, established and run by the Hamad Al Thani family, believes in fostering human, social and economic development in Qatar through education and research. It is a non-profit organisation and as such has always been committed to principles of transparency and sustainability.


UTI Holdings

Security, IT, construction and facility management group UTI Holdings has adapted its management systems to align with effective governance mechanisms, with transparency at the forefront. The firm has integrated a code of ethics, ensuring that standards are maintained throughout the organisation as it grows and expands across geographies.


OAO Lukoil

Recognising that trust between stakeholders is of vital importance for any company, Lukoil has shown a real commitment to disclosure and accountability, concerning remuneration, structural changes, and investor relations. The company attempts to pursue a dividend policy that provides clarity to shareholders while maintaining a strong investment platform.

Saudi Arabia


Adhering to strict governance regulations as administered by Saudi Arabia’s Capital Market Authority (CMA), SABIC aspires to ever-greater levels of transparency and full disclosure of internal mechanisms. The firm continually refers to its vision and mission statements when considering new areas for expansion – whether internally or externally.



capitalandCapitaLand observes high standards of corporate conduct in line with the principles of the Monetary Authority of Singapore’s Code of Corporate Governance. CapitaLand recognises that corporate governance is key to the sustainability of its business. The group develops and maintains sound and transparent policies and practices to meet its business needs as a trusted and respected business enterprise.

South Africa

Anglo American Platinum

anglo-americanAnglo American Platinum considers socially responsible business practices as a core dimension of its ongoing strategy for the future. Having come through some recent difficulties concerning industrial action, the company continues to work with its employees to better maintain communications and sustain developmental mechanisms in the community from which it operates.

South Korea

Shinhan Financial Group

Shinhan Financial Group’s corporate governance agenda is to fully diversify in order to protect stakeholders from market fluctuations. Its interests include banking, asset management, securities brokerage and a variety of other corporate and consumer products. At board level, a number of different functional expertises are represented.



Abengoa’s business is to provide sustainable technology solutions to the energy and environmental sectors. The company’s procurement systems, emissions targets and social development projects, which senior executives believe go hand-in-hand with good governance, are proof of its commitment to CSR.



Pouring vast amounts of resources into governance efforts, Electrolux maintains a fully audited structure, built on codes and policies that set a new standard in sustainable frameworks. Stakeholders are kept well informed of new strategies and changes in the group’s management.



nestleNestlé is all about creating shared value for the communities around it. The company is actively engaged in a number of social and development projects that focus on sustainability and human rights, in sites all over the world. It is also deeply committed to becoming the world’s leading nutrition, health and wellness company.


Fubon Financial Group

A leader in corporate citizenship, the Fubon Financial Group has set out to increase stakeholders by becoming involved in its local community and investing in the future. In recent years the firm has steadily advanced EPS inline with corporate strategy and the group’s mission statement.


Thai Beverage Public Company

The Thai Beverage Public Company is currently listed on the Singapore Exchange and, as a condition, abides by an extensive code of conduct. The company is a leader with regards to good governance and exhibits an impressive ability to satisfy stakeholders through full disclosure and transparency.


Zorlu Enerji Elektrik Üretim

zorluFrom a governance perspective, Zorlu Enerji Elektrik Üretim provides stakeholders with one of the most valuable assets: diversity. With a long list of subsidiaries, the firm’s main line of business is generating electricity on a multinational basis, which is achieved using natural gas, geothermal energy, wind power, as well as hydroelectric energy.


Abu Dhabi Commercial Bank (ADCB)

In 2012, ADCB set out a strong plan around sustainability, a well defined and communicated risk outlook, and the promotion of retaining and bettering stakeholder engagement. The bank’s interests are fully diversified, ranging from property to engineering, Islamic finance, and many others.


Land Securities

For the UK’s largest Real Estate Iinvestment Trust, the importance of sustainability is a long-term issue. With external auditors and internal controllers, Land Securities aims to take an active role in creating a successful business while acknowledging the importance of a better environment.



A vertically integrated firm with a dynamic approach to growth, Metinvest continually updates its code of ethics in order to acknowledge changes in investor attitudes. The firm’s governance aims are built from the top down, with a centralised and monitored management system that relies on communication and commitment.


Valero Energy Corporation

As an international manufacturer and marketer of transportation fuels, other petrochemical products and power, Valero’s market presence is defined by its determination to recognise the environmental and public concerns inherent in its operations. It is structured around a number of governance guidelines and charters that both affirm productivity and ensure adherence to full disclosure policies, while sustaining stakeholder profitability.



EADS says shareholders to get higher dividends in future

Airbus owner signals change in strategy that may benefit shareholders

Redefining corporate responsibility: award winners 2013

Organisations are seeking to correct past workplace models, taking stock and embarking upon a new age of responsibility. Here, the Corporate Governance Report celebrates those firms carrying the governance torch

RBS shareholders file suit against bank and former directors

RBS shareholders have launched a class-action suit over the 2008 rights offering a few months before the bank was bailed out by British government

Strategic CSR stops small companies being overshadowed

The 2013 Ethics and Leadership Conference has highlighted the need for companies within the same industry to group together to exercise their corporate social responsibility

Motorola announces support for 30 Asia-Pacific education initiatives

The Motorola Solutions Foundation Grants will affect 79,000 individuals

Italian banks to “change corporate governance”

Banks with more out-dated corporate governance structures were hit hardest by crisis, according to Fitch statement

Social business collaboration enhances corporate communications

Social media technologies offer unprecedented digital opportunities to share information, communicate and collaborate which are now being translated into a means of internal corporate communication management

Tech Data delays annual report after regulator questions

US-based technology wholesaler made to delay the publication of its annual report after questions are raised about accounting practices of its UK subsidiary

FRC report reveals highs and lows of UK governance

A recent report by the FRC reveals the extent by which recent reforms have changed corporate governance in the UK, as well as the effect non-compliance has had on the organisation’s finances

Hedge fund group sues Cayman Islands over corporate governance reform

As local authorities strive to make hedge funds based in the islands more transparent, some mangers object

Community spirit

Research has shown that companies giving back to the communities in which they work tend to enjoy better long-term results

Moody’s appoints new head of internal audits

New vice president of internal audit will be in charge of corporate governance, risk management and internal control processes

IASB chairman defends stance on prudence

Despite criticism, accountancy regulator’s chairman says the downgrading of prudence from a fundamental concept is justified

Gunaxi: Bribe or gift?

The efforts of multinational companies to do business in China is marred by the tradition of Gunaxi – the concept of courting clients and networking that traditionally involves gift giving

Churchill Mining grants 5.4 million share options

Following what many have perceived to be detrimental legal altercations through the past year, the London-listed mining company has since granted new share options to many of its employees

Mandatory auditor rotation unnecessary, says Canadian business institute

Calls to make rotation of auditing firm’s compulsory are rejected by Canada’s Institute of Corporate Directors

The many faces of auditing

Both mandatory and discretionary, auditing comes in many guises

Should defined contributions be re-distributed?

Both the OECD and the House of Lords have criticised the now widely-used defined contributions plan for not accommodating adequate savings unless employees are high earners

Fed Res enhances internal auditing standards

The US Federal Reserve is strongly encouraging banks to consider their internal auditing strategies to avoid regulatory intervention