Australian investors are becoming dangerously indifferent to the value of good corporate governance.
That is the analysis of the adviser on governance issues to the Australian Institute of Superannuation Trustees (AIST), Dean Paatsch, who said too much money was being directed to “sell side” ratings houses and not enough to “down side” research.
Addressing an AIST conference, he said that there was not enough resourcing for governance research, which was being undertaken by just a handful of people.
Paatsch cited a number of examples of recent corporate deals in Australia where he believed not enough attention had been paid to down side issues.
One of those deals was Seven’s acquisition of WesTrac, which he described as both “weird” and “strange”.
Paatsch said that “sell side” analysts had backed the deal even though, in private, many had expressed their reservations.
He said it was all too difficult to find people willing to stand up and get rid of bad boards.
“Too frequently no one stands up for shareholders,” Paatsch said.
