THE BOSSES of some mining companies are letting their shareholders down by ignoring corporate governance issues, a hard hitting report has found.
According to the research, dozens of London-listed firms are missing out on making more money for their investors through their bungling in the boardroom.
Half of the 179 listed companies have lost shareholders 60 per cent of their investments over the past five years, the report by Opus – a specialist in running oil, gas and mining companies – said.
Out of a possible eight points, the sector only scored an average of three on corporate governance.
The main market is subject to corporate government rules but the Alternative Investment Market – where many of the problems exist – is not as strictly policed.
The research laid bare the recruitment policies of many companies, with only four per cent of directors interviewed formally, and the remainder coming through personal friendships or contacts.
Half of companies have no finance director while only 3.7 per cent of board positions are held by women.
The Opus figures also revealed that the top 10 performing companies on corporate governance increased shareholder value by 92 per cent, while the bottom 10 decreased value by 80 per cent.
Opus managing partner Brian Martin said companies should sharpen up their act to provide a better deal for shareholders.
“Following corporate governance helps make more money, it’s good for the heads of these companies and the shareholders. Unfortunately some do not see it that way. It is a question of accountability.
“There are examples where the chiefs of companies are having chauffeur driven cars or taking private jets when they do not need to, which is unfair on shareholders.
“Some do not want more checks and balances.”
Martin called on the Financial Services Authority to crack down on those flouting rules. The report comes amid a flurry of Russian resource companies looking to list in London but with some falling short on corporate governance grounds.