Proactive Investors -
- FTSE 100 hit session peak of 7,629.08
- Dow Jones stays weak; Nasdaq gains on Nvidia results
- US credit rating placed on negative watch by Fitch
Box-ticking boards
A City report has concluded that companies are hesitant to deviate from best practice, for fear of backlash from proxy agencies and in some cases, shareholders, who are setting policies on a “one size fits all” basis and holding companies to ransom through negative voting recommendations.
That finding comes in ‘Better boards for growth companies‘, a report by City broker finnCap, written in conjunction with the Quoted Companies Alliance, which is based on a study that surveyed over a hundred non-executive directors (NEDs) of smaller quoted companies.
The survey gathered insights from the NED community regarding NED remuneration and highlights the challenges faced by growth companies in attracting top talent to their boards. The report calls for a re-evaluation of remuneration practices, greater flexibility in corporate governance guidelines, and a shift in cultural attitudes towards entrepreneurialism and risk.
It concluded that the market has moved towards gold-plated governance where decisions about board selection and remuneration are driven by top-down policy as opposed to strategic outcomes.
The report said: “These policies undermine the flexibility that corporate governance guidelines provide and the flexibility that growth companies need. The individual circumstances and needs of companies should be acknowledged. Equally, companies must ensure transparency of dialogue around decision-making rationale and build trust.”
The survey also highlighted concerns that board selection has become a “box-ticking” exercise and indicated that diversity has become a divisive topic.
Fizz to be lost
Some of the UK's favourite soft drinks could be in short supply this summer because of a series of strikes at Coca Cola Europacific Partners (LON:CCEPC).
Hundreds of workers at the largest soft drinks plant in Europe, in Wakefield, have voted for industrial action by a margin of 87% in protest over a pay offer which does nothing to address the cost of living crisis.
The workers are planning 14 days of strikes between Thursday 8 June and Thursday 22 June.
In a statement, Unite general secretary, Sharon Graham said: “Coca Cola Europacific Partners is making profits in the billions but it's delivering a pay cut to the very workers who are making them.
“Its profits are up 37% to an astronomical £1.85 billion. Offering workers a real terms pay cut when business is booming is nothing short of corporate greed. The workforce are rightly furious at the company’s profiteering.
“The workers at Wakefield have Unite’s total support.”
CCEP’s products include Coca Cola, Diet Coke, Coke Zero, Dr Pepper, Fanta, Fanta Lemon, Fanta Fruit Twist, Sprite, Monster and Relentless. The plant, which can produce 360,000 cans per hour, and 132,000 bottles per hour, also produces Schweppes Tonic, Diet Tonic, Bitter Lemon, Ginger Ale and Lemonade.
Oh to be in tech
The FTSE 100 index was languishing at session lows as Wall Street started mixed on Thursday, with US blue-chips falling on debt default concerns, but the tech-laden Nasdaq jumping after strong results from Nvidia.
Around 20 minutes after the New York open, the Nasdaq had added 1.3%, while the S&P 500 was up 0.6%, but the Dow Jones had fallen 48 points or 0.2% at 32,751.
NVIDIA (NASDAQ:NVDA) shares were up 24.9% at US$381.50, sending fellow AI stocks Advanced Micro Devices (NASDAQ:AMD), C3.ai, and Taiwan Semiconductor Manufacturing up 9.4%, 5.7%, and 9.7%, respectively.
Meanwhile, US first-quarter gross domestic product (GDP) was upwardly revised to 1.3% quarter-over-quarter annualized from 1%.
“NVIDIA news and US GDP data have offset news that the Fitch Ratings agency has put the US AAA rating on negative watch, citing concerns over the debt ceiling negotiations,” commented FOREX.com market analyst Fiona Cincotta.
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