We believe that
the wider spread of share ownership is in itself a public good and
may sometimes even be preferable to higher economic efficiency.
Tax regime should
never stop tinkering with the tax code. Has this ever been
designated a form of obsessive behaviour by the medical community?
A case in point are the latest proposals for the taxation of
investment income and capital gains in Germany.
We do not want to go into technical details but suffice it to say
that the proposals are the result of a non-participatory form of
democracy that is prevalent in Western Europe.
So-called political elites and technocrats representing the lobbies
with an interest in the matter have produced legislation that will
be far from neutral in its effects on business and the way the
citizen invests his money.
As matters stand, investment in pooled vehicles of various kinds
will be at an advantage and investors that hold shares in individual
companies and want to manage their portfolio will be penalised.
This is contrary to the interests of wider share ownership and
About Pro Governance
Our Mission is to
campaign for the protection of investors and savers by promoting
good corporate governance.
We also believe that the wider spread of share ownership is in
itself a public good and may sometimes even be preferable to higher
Shareholders in publicly listed companies are widely dispersed and cannot
micro-manage the affairs of the companies they are invested in. The
international nature of today's shareholder registers make this also
impossible for large institutional investors.
On the other hand, abuses that have developed over the past few years make
it imperative that company managements are supervised in a more efficient
Tax incentives and institutional constraints have favoured the growth of
large institutional investors at the expense of small individual
shareholders. This makes it more important than ever that these investors
behave like fiduciaries and have the interests of their clients at heart.
This means that the business of
money management cannot be treated like any other profit-maximising business.
Like the medical, legal or academic professions the interest of the clients
has to have priority when critical decisions have to be made with regard to
companies the money managers are invested in.
We at Pro-Gov think that the establishment of an effective international forum
combining representatives from the national organisations of individual
shareholders and investors will be an effective step in the direction of
improving corporate governance.
At the moment the corporate
Governance discussion is limited to academics, journalists in the quality
business press, institutional shareholders and companies and their business
associations as well as politicians. The one party missing on the table are
the real investors who - with some exceptions - voiceless in the debate.
isn't what's illegal; it's what's legal"