Shipping corporate governance: The good, the bad and the ugly

Lloyd's List: The Shipping Podcast

There have been shipowners listed on Wall Street going back to the 1980s, but it was only in the mid-2000s – with the China trade boom – that the shipping industry really came to the US public markets in a major way. In the two decades since then, there have been some controversies with these listed shipowners. These controversies have involved conflicts of interest: self-dealing by private sponsors and management to the detriment of common shareholders. There have been cases of public owners buying ships from their private sponsors at prices that are – shall we say – advantageous to the related-party sponsors. There have been fees paid by the public companies to their own sponsors for technical and commercial management at levels that have unduly enriched those sponsors. There have been public company managements that have conducted highly dilutive equity sales, wiping out over 90% of their own share value to raise money to buy ships from their own private companies. And there have been insiders that have had attractive offers to buy the public company – offers that would have enriched the common shareholders – but offers that were blocked because it was not in the interest of the insiders. When it comes to corporate governance – the good, the bad and the ugly – there is one person who is considered the expert on this subject, equity analyst Michael Webber. He started his own firm, Webber Research, in 2019 and before that was the shipping analyst at Wells Fargo. Every year, Webber puts out a scorecard that ranks shipping companies based upon their corporate governance and ESG practices. It is very closely watched – and this year’s rankings have just been released. Webber joins Lloyd’s List senior reporter Greg Miller on this week’s episode to talk about the scorecard and what it tells us about shipping industry behaviour.