CORPORATE GOVERNANCE
Bugbears still plague listed property zone
Has the SA listed property sector’s corporate governance kept pace with all its dramatic changes?
SA’s listed property sector has exploded over the past five years with a slew of listings, mergers, acquisitions and more capital raisings than any other sector on the JSE. But the question remains whether the sector’s corporate governance has improved with these changes. The sector’s worth has grown from about R8bn in 2000 to about R60bn in 2006 and about R750bn now. Just more than 10 years ago, then-brokerage Barnard Jacobs Mellet (BJM) released a report about aspects of corporate governance in the listed property sector that, if improved, could lead to increased shareholder returns. A major issue raised by the report, that some market commentators agree has not been addressed adequately, is that various listed property companies still have external management companies, as well as in-house executives and staff. This means the external management company and the internal staff are both rewarded for asset management and growing the fund. A CEO could be rewarded for his or her funct...
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