CANNES-Despite the acceptance of the euro, this continent still lacks unification. Just ask any of the panelists in a Mipim session entitled Do We Need A European Corporate Governance Code?

While individual countries have addressed–or are addressing–the issue of transparency and accountability, the lack of unity on the subject may hamper investors’ interest in cross-border trading, some panelists noted. Throughout the discussion, the debate seemed to reflect many of the issues raised a few years ago in the US, when Sarbanes-Oxley became the law of the land.

“It’s better that we do it ourselves,” said Elizabeth Peace, chief executive of the British Property Federation. “We don’t want government poking its nose in our business.”

But does Sarbanes-Oxley, despite its government origins, offer a model for Europe? Not at those prices, Peace said. “It’s jolly expensive, and that’s one reason so many REITs have gone private.”

Much of the conversation revolved around the need to regulate the unlisted companies, since some form of code exists in the major European countries for listed firms. Most of the panelists believed that the market itself would bring that pressure to bear.

“It’s the investor who will go to the specific company and ask, ‘Why haven’t you implemented this?’,” stated EPRA CEO Nicholas van Ommen (EPRA is the European equivalent of Nareit). The only reason for not implementing governance would be local legal restrictions, he added.

Paul Marcuse, CEO of AXA Real Estate Investment Managers, sees the issue as one of maturation. “This is still a relatively immature market,” he told the assembled crowd. “But it’s a market that’s growing rapidly, and this needs to grow with it.” It will be key to investor activity, he added: “Investors will discriminate based on these factors.”

If the continent as a whole does address a unified code, it will have to do so in relatively small bites, Marcuse argued. “The code should provide basic standards,” he pointed out, despite the fact that the industry has so many different levels of investor. “We shouldn’t try to address everyone or it will take too long to get anything.”

At the end of the day, the need for a unified code, embracing listed and unlisted companies alike, was clear, and it transcends profit. “This is about moral and ethical behavior,” van Ommen concluded.

Want to continue reading?
Become a Free ALM Digital Reader.

Once you are an ALM digital member, you’ll receive:

  • Unlimited access to GlobeSt and other free ALM publications
  • Access to 15 years of GlobeSt archives
  • Your choice of GlobeSt digital newsletters and over 70 others from popular sister publications
  • 1 free article* every 30 days across the ALM subscription network
  • Exclusive discounts on ALM events and publications

*May exclude premium content
Already have an account?


NOT FOR REPRINT

© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.

 

GlobeSt Net Lease Spring 2024Event

This conference brings together the industry's most influential & knowledgeable real estate executives from the net lease sector.

Get More Information
 

GlobeSt

Join GlobeSt

Don't miss crucial news and insights you need to make informed commercial real estate decisions. Join GlobeSt.com now!

  • Free unlimited access to GlobeSt.com's trusted and independent team of experts who provide commercial real estate owners, investors, developers, brokers and finance professionals with comprehensive coverage, analysis and best practices necessary to innovate and build business.
  • Exclusive discounts on ALM and GlobeSt events.
  • Access to other award-winning ALM websites including ThinkAdvisor.com and Law.com.

Already have an account? Sign In Now
Join GlobeSt

Copyright © 2024 ALM Global, LLC. All Rights Reserved.