The FCA should press ahead with proposed reforms to UK listing rules. Then think of a few more.
Imagine you’ve successfully founded a company in the UK. You sell your technology-related product globally. You manufacture at home and in China. You have a few hundred employees.
You’d like to take some money out of the company, so you look into listing. Your inclination is to list in the UK.
But you find that if you do this, your valuation upon IPO will be around 30% lower than if you list in the US. You will also be expected to take a significantly lower salary as CEO than you would if you went to the US. And you will not be allowed to issue shares giving you more voting rights than new shareholders — despite the fact that the company’s success stems from you having made consistently good decisions since your initial brilliant idea.
Skimming through the regulations you’ll have to adhere to if your firm is listed in the UK is frying your brain (and that’s before you get to those around diversity and climate), as are your conversations with other CEOs about their trying interactions with big UK investors’ stewardship teams. Oh, and those same investors would like you to know that after nine years, they will probably demand that you stand down from your own board.
The UK has been in the habit of constantly issuing new codes for companies to comply with; the Financial Reporting Council’s “ guidance” to boards alone extends to some 40 pages. There is almost nothing a quoted company can do without checking some kind of compliance along the way.
What are you going to do? You are going to list in the US....
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