Corporate Governance standards among listed property companies diverge widely across Europe, according to new study published by the European Public Real Estate Association (Epra) on Wednesday.

Corporate Governance standards among listed property companies diverge widely across Europe, according to new study published by the European Public Real Estate Association (Epra) on Wednesday.

The study found that the biggest real estate markets generally scored the best with the UK, the Netherlands and Switzerland leading the list of countries surveyed. France, Belgium, Italy, Austria, Germany and Greece fell below the study average.

The survey analysed various corporate governance criteria such as executive compensation linked to performance, disclosure standards, and board structure and composition. The data was based on the 2006 annual reports and other publicly available data from more than 100 companies on the FTSE Epra/Nareit Index covering developed Western European markets.

'With the EU corporate average ranking at 9.73, from a possible top mark of 16, you could say European property companies just about get a pass based on a minimum standard of achieving 60% of our criteria,' Epra CEO Philip Charls said.

According to Erasmo Giambola, Assistant Professor in the Finance Group of the University of Amsterdam and author of the report, the link between managerial compensation and performance and/or stock value is a key determinant of corporate governance quality.

The perceived independence of the company’s board is another driver in judging governance performance. The report showed that 32% of the firms in the EPRA survey have adopted a two-tier board structure, which is based on a clear separation between the management board and the supervisory board.

'There is clearly some way to go in terms of improving corporate governance at European real estate companies. We think firms should aim to achieve at least 80% of the maximum to improve transparency in their operations and to attract more investment capital flows,' Charls concluded.

The annual study is to be used as an Epra benchmark to measure yearly improvements at the company and market level.