Australian institutional investors have been encouraged to remain shareholder activists in the interests of ensuring appropriate corporate governance within major companies both domestically and overseas.

The executive director of the International Corporate Governance Network, Anne Simpson, pointed to the success institutional investors, including Australian superannuation funds, have had dealing with the News Corporation transfer to US Delaware jurisdiction.

Addressing the Conference of Major Superannuation Funds on the Gold Coast, Simpson said it was important for Australian institutional investors such as superannuation funds to be aware of what was happening in jurisdictions such as the US and the possible knock-on effects with respect to their investment objectives.

She said the US had experienced a spectacular series of corporate scandals that had given rise to new legislation aimed at overcoming such situations, but shareholders were still battling for basic rights in the face of “Soviet-style” director elections.

“Our view is that an opportunity was missed after the US (corporate) collapses,” Simpson said. “Too often, the options (confronting investors) are ‘sell or sue’. In those circumstances, you need to know the governance risks before going over there.”

Referring to the existing situation in the US, Simpson said, rather than piling on more and more regulation, some action on shareholder rights might have helped.