With increased global attention on enhanced corporate ESG oversight and maximising shareholder value, businesses in Europe are finding themselves in the spotlight.
In a recent post by Diligent, the company highlighted some of the key trends around European corporate governance in 2023.
Insightia, a Diligent brand, in their latest Corporate Governance in 2023 report, discusses how the intertwining elements of the current cost-of-living crisis and new regulatory measures like the Corporate Sustainability Reporting Directive (CSRD) are pushing ESG factors to the forefront of considerations for institutional investors.
Insightia Editor-in-Chief Josh Black observed, “Recent regulatory changes are set to dramatically reshape how issuers supervise and report on ESG-related risks. Furthermore, they will influence how investors engage with companies on these crucial issues. We anticipate a busy 2023 for activism, with undervalued companies and rising inflation making attractive targets for activists.”
A pivotal development is the adoption of the CSRD in November 2022, which marks a significant step towards greater ESG accountability. It mandates EU companies to not only comply with upcoming European Sustainability Reporting Standards, but also ensure third-party audits of their reports.
Compliance is expected from companies already covered under the EU’s Non-Financial Reporting Directive (NFRD) starting in 2024, with the first reports expected in 2025. Other large corporations are required to comply by 2025, submitting their first reports by 2026.
Insightia’s report, prepared in partnership with White & Case and Alliance Advisors, highlights the escalating shareholder concern over the financial sector’s continued fossil fuel financing. Shareholder proposals and lawsuits are being utilised to voice these concerns.
Simultaneously, institutional investors are putting CEO pay structures under the microscope. The spotlight is on compensation plans that don’t align with wider employee pay and the rising cost of living. In 2022, record highs were reached in FTSE 350 executive pay, with an average total CEO realised pay of £3.03m.
Shareholder activists are becoming more vocal in their push for the sale of undervalued companies in a bid to unlock more value creation opportunities. Rising interest rates and inflation are restricting growth options, fuelling this demand.
The report details that 15 companies faced demands for a sale and/or acquisition of a third party in 2022, up from 13 in 2021. However, there was a decrease in opposition to M&A transactions, from 29 in 2021 to 15 in 2022.
Black noted, “Europe’s preference for more private activism could lead to more public board disputes in the future, especially in markets that allow investors to call shareholder meetings outside of proxy season.”
With a comprehensive overview of company data, business leaders can identify potential issues quickly and respond effectively, reducing the organisation’s vulnerability to shareholder activism threats.
Diligent recently launched Board Reporting for ESG, a ‘first-of-its-kind’ dashboard to provide a full view of an organisation’s ESG posture.
Read the full post here.
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![Temenos (SIX: TEMN) today announced that National Bank of Iraq (NBI), part of the Capital Bank Group, has successfully gone live with Temenos core banking and payments. NBI, which has 27 branches across Iraq, offers a comprehensive range of services to individuals and businesses in the country. Since 2005, NBI has been majority owned by Capital Bank, one of the top financial institutions operating in the Jordanian and regional markets, with assets of approximately JOD 7.6 billion[1]. With this implementation, NBI moved from its legacy systems onto the same core banking platform as other entities in the Capital Bank Group. This will enable NBI to operate more efficiently and integrate seamlessly with other systems to develop new products faster and deliver an improved customer experience. Capital Bank Group is a long-standing Temenos customer with other entities in the Group including Capital Bank of Jordan, Bank Audi, Société Générale Bank Jordan and NBI Saudi Arabia, already on the Temenos platform. NBI also becomes the first part of the group to adopt Temenos Payments, which enabled the bank to process more than 100,000 transactions of incoming and outgoing domestic and international payments in the first 15 days of operation, with a 99% straight-through processing rate. The migration to the Temenos platform for core banking and payments at NBI was completed in under 12 months thanks to Temenos’ pre-configured banking and payments capabilities and APIs which reduced the need for complex customizations, as well as close collaboration between Temenos, NBI, Capital Bank and delivery partner ITSS. This success was recently recognized in the IBS Intelligence Innovation Awards, with Capital Bank winning ‘Best Implementation of Core Banking Services'. The implementation at NBI follows several other successful transformation projects with Temenos for Capital Bank in the last few years, including the launch of NBI’s branch operations in Saudi Arabia in just 45 days, as well as the integration of Bank Audi and the former Jordanian operations of Société Générale, each of which was achieved in under four months. Collectively, these projects helped Capital Bank to increase operational efficiency by more than 50% within three years, bringing significant cost savings and an improved customer experience. With faster, more accurate processing and immediate service requests, the bank has maintained high customer retention rates and a reputation for service excellence. Izzidin Abusalameh, Chief Operations Officer, Capital Bank Group, commented: “This achievement marks a significant milestone in our digital transformation journey and positions us as a leading player in the banking industry. We have seamlessly transitioned the National Bank of Iraq to a cutting-edge core banking system which will not only enhance operational efficiency but also support providing our customers with a superior digital banking experience. Our continued partnership with Temenos has not only provided us with an advanced technological platform but has also facilitated a culture of flexibility and adaptability, enabling us to execute our ambitious growth plans.” Lee Allcorn, Managing Director, Middle East & Africa, Temenos, said: “Congratulations to National Bank of Iraq and the Capital Bank team on this successful implementation that gives NBI business agility and the same modern technology platform and ability to deploy fast with pre-configured banking capabilities as the rest of the group. With Temenos, Capital Bank Group is future-ready, and we are proud to support them as they continue to innovate and leverage our platform to grow sustainably and enhance the banking experience for customers.”](https://fintech.global/wp-content/uploads/2024/04/rupixen-Q59HmzK38eQ-unsplash-2-218x150.jpg "Flutterwave teams up with Acquired.com to streamline outward remittances in EU and UK")
