The European Corporate Governance Institute Meets in Berlin
The European Corporate Governance Institute (ECGI) held its Annual Members’ Meeting in Berlin this week (3 - 4 May), bringing together international academics and practitioners in the field of corporate governance for a programme that included a panel, a debate, a dinner, a general assembly, a lecture and a prize-giving, hosted by ESMT Berlin.
The focus panel on “Common Ownership: Antitrust Meets Corporate Governance”, moderated by Prof. Marco Becht (ULB), composed of Prof. Xavier Vives (IESE), Barbara Novick (BlackRock), and Greg Medcraft (OECD), discussed the challenges faced by asset managers holding significant stakes in multiple companies in the same industry. The discussion brought out very clearly the tension between increased stewardship and governance involvement on the one hand, and concerns about potential collusion between competing firms having the same shareholders. The discussion highlighted the desirability of increased stewardship engagement that does not impair product market competition and thus entails no antitrust liability risk for asset managers.
In the Oxford Union-style debate that followed, Levin Holle (German Federal Ministry of Finance) and Peter Montagnon (Institute of Business Ethics) proposed the the motion: “This House believes that Brussels should have the power to block foreign takeovers”. They were opposed by Professors John C. Coffee (Columbia Law) and Ernst-Ludwig von Thadden (University of Mannheim). The debate was chaired by Lisa Rabbe (ECGI). After a lively debate including interventions from the floor, the House voted by a narrow margin against the motion.
The ECGI Members’ dinner took place on Thursday evening, with Dr. Eckhard Cordes (EMERAM, Cevian Capital, Bilfinger, Volvo), providing the after-dinner speech to an audience of ECGI members and invited guests. Dr. Cordes shared his personal experience, having been a member on thirteen boards in Germany, Sweden, the United Kingdom and the United States.
On Friday, the annual lecture was delivered by Professor Antoinette Schoar (MIT and currently visiting Imperial College, London). Professor Schoar’s lecture, entitled “Is Big Data a Challenge for Boards?”, presented new research on the use of personal data in the United States by financial intermediaries in marketing pre-approved credit cards. The study shows that companies utilise the information to selectively sell more expensive products to less educated customers by shrouding the actual terms within the marketing material. The practice is not illegal but poses a moral dilemma for boards.
Following the lecture, ECGI awarded two research prizes for the best papers in the Finance and Law Working Paper Series’ from the previous year.
The Finance Series prize of €5,000, which is sponsored by Aberdeen Standard Investments, the global fund manager, was awarded to Professors Mike Burkart (London School of Economics), Salvatore Miglietta (Norwegian Business School) and Charlotte Ostergaard (Norwegian Business School), for their paper on “Why Do Boards Exist? Governance Design in the Absence of Corporate Law” (ECGI Finance Working Paper 504/2017).
The Law Series prize of €5,000, sponsored by Allen & Overy LLP, the international law firm, was awarded to Professor John C. Coffee (Columbia Law School) for his paper “The Agency Costs of Activism: Information Leakage, Thwarted Majorities, and the Public Morality” (ECGI Law Working Paper 373/2017).
Speaking at the event, Professor Marco Becht, Executive Director, ECGI said
The extended programme this year was a great success and significantly improved the dynamics and attractiveness of the event to all of our members. We are particularly grateful to Investor AB and BP plc. for the donations they made to the European Corporate Governance Research Foundation (ECGRF). Without the support of ECGRF, the augmented level of activity would not have been possible. We are also grateful to ESMT Berlin and its President, Prof. Jörg Rocholl for hosting this years’ event in such an outstanding way.
Click here to read more about the Working Paper Prizes awarded at the event.
Click here to view the programme for the event.
Click here to visit the event page