FTSE 100 remains weak, near session low; board policies criticised
Proactive Investors
Published May 25, 2023 15:54
FTSE 100 remains weak, near session low; board policies criticised
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.
Get The App
“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.
Read more on Proactive Investors UK
Disclaimer
Written By: Proactive Investors
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.