Foreign companies are listing on Aim with ‘insulated boards’, warns Alan MacDougall, a director of Pensions Investment Research Consultants (Pirc). Normally a company’s articles of association will stipulate directors face re-election but MacDougall says: ‘We are concerned about the way that foreign companies use Aim as entry to the public arena in a way that gives them opportunities to engage in practices that most of the market has left behind.’

Pirc advises pension funds on how to vote on corporate governance issues. MacDougall’s comments follow the London Stock Exchange’s (LSE) drive to attract foreign companies. There are currently 330 overseas-incorporated businesses quoted on Aim.

MacDougall questions whether regulators can both operate a market and safeguard investors’ rights. As an ‘exchange-regulated’ market Aim is both promoted and overseen by the LSE.

by: Simon Keane