EUROPE - European pension funds need more voices that can speak for their sector as shareholders, according to Alan MacDougall, managing director of corporate governance specialist PIRC.
"Pension funds need to focus their attention on achieving board structure best practice and uniform disclosure in company reporting," he added.
MacDougall continued: "We need voices that can speak for the sector of the market otherwise it is impossible to have a meaningful debate." This was despite prominent voices such as the UK National Association of Pension Funds (NAPF).
He added that debate with custodians is difficult because "they have only very recently found a voice for themselves", although he was hopeful that the debate can be continued.
The PIRC director made his comments while presenting the European Corporate Governance Review 2006, the first major study of pan-European governance practices and trends, in London today.
The review shows increasing convergence towards a European standard on corporate governance practice, but also highlights that significant differences between individual markets persist.
Reviewing 289 companies across 15 countries, the study found that 84% of European company boards have a separate chair and chief executive officer (CEO). "This is clearly best an common practice in Europe," said Hendrik Tiesinga, senior researcher at PIRC.
The analysis also found that it is mainly French and Swiss companies that still have combined chairman and CEO roles. Overall, 69% of European directors are elected on an individual basis, the remainder being elected on a collegial basis.
MacDougall said it was now possible to start speaking about European corporate governance, "albeit what is still a diverse set of corporate legal environments in the various discrete European capital markets".
"It is important to pay attention to broader commitments and local market regimes," he continued.