The material on this site is for financial institutions, professional investors and their professional advisers. It is for information only. Please read our Terms & Conditions, Privacy Policy and Cookies before using this site. Please see our Subscription Terms and Conditions.

All material subject to strictly enforced copyright laws. © 2022 Euromoney, a part of the Euromoney Institutional Investor PLC.

In all fairness

Only an idiot bites the hand that feeds it. That is why it is ludicrous to imagine investment banks will ever render truly objective opinions on deals. They serve the interests of the companies that ask them to draft these judgments. And it is always clear from the outset what the client's desired conclusion will be.

This is especially the case when the body writing the opinion is also advising the client on the deal. In that case the conflict is clear and present. In most other cases, the conflict derives from the bank seeking future business from the company. Both make it hard to accept that their views are anything more than high-class marketing material.

No wonder many influential shareholders in the US want big changes to the practice. Pension fund Calpers this week boldly stated that banks advising on a deal should be barred by regulators from rendering a fairness opinion. In theory this seems sensible. In practice it's silly.

For one, the whole premise of a fairness opinion was never to give shareholders an objective view, though many companies made it seem otherwise. The main purpose has been to provide legal cover for directors by providing a paper trail showing that their decisions on important deals were not made in a vacuum.

You have reached premium content. Please log in to continue reading.

Read beyond the headlines with Euromoney

For over 50 years, our readers have looked to Euromoney to stay informed about the issues that matter in the international banking and financial markets. Find out more about our different levels of access below.


Unlimited access to and

Expert comment, long reads and in-depth analysis interviews with senior finance professionals

Access the results of our market-leading annual surveys across core financial services

Access the results of our annual awards, including the world-renowned Awards for Excellence

Your print copy of Euromoney magazine delivered monthly

£73.75 per month

Billed Annually


Unlimited access to and, including our top stories, long reads, expert analysis, and the results of our annual surveys and awards

Sign up to any of our newsletters, curated by our editors


Already a user?

We use cookies to provide a personalized site experience.
By continuing to use & browse the site you agree to our Privacy Policy.
I agree