A paper published today (4 July 2005) by the International Securities Lending Association (“ISLA”) challenges the myth that securities lending poses a threat to good corporate governance and makes a series of recommendations for good practice.
Written by Mark Faulkner, a leading industry consultant, the ISLA paper uses data taken from recognised industry sources to substantiate its findings. The information collated demonstrates that other factors are more significant than securities lending when influencing voting behaviour; the data shows the scale of securities lending does not typically exceed the voluntary disenfranchisement seen typically at AGMs.
