Responsible Investor

RI round up - July 2

RI’s regular round-up of the most important responsible investment news.

Paul Myners, UK Financial Services Secretary, has called for shareholders to take “front-line responsibility” for the companies in whose equity they have invested their client funds. In a speech this week to the British Bankers Association, Myners said: “It is important to stress that regulation cannot be the sole load bearing instrument in ensuring that our financial system is sound and able to fulfil its role in the wider economy. The greater component of strain has to be taken by governance and investor stewardship.”
Myners also talked extensively about potential issues with the concepts of shareholder value and fair value in investment
Link to speech
ShareOwners.org, an organisation that says it is non-profit and non-partisan has launched with the aim of educating and organising US investors to support short- and long-term financial market reforms. The organisation said a survey of US investors it had commissioned by Opinion Research Corporation found that more than three out of four (79%) of 1,256 US investor respondents wanted to “see strong action taken to correct the problems that exist today” in the financial markets. Richard Ferlauto, director of corporate governance and pension investment, American Federation of State, County and Municipal Employees (AFSCME), and chair of ShareOwners.org, said: “As of today, the average American investor has a way to weigh in on and be heard about needed financial markets reforms. The severe losses suffered by tens of millions of Americans in their 401(k)s, mutual funds, traditional pension plans and other investments all point to the need for a new emphasis on shareowner rights and meaningful regulation in order to ensure the financial security of American families.”
Link to site.
Brendan Barber, general secretary of the UK Trades Union Congress, has said that fund managers that are meant to exercise ownership rights and responsibilities are failing to do so, after the TUC annual fund manager voting survey received responses from just 40% of UK

fund managers compared to 68% five years ago. On the TUC blog, Barber said: “What is worse is that many will not even tell the unions that represent thousands of pension fund savers whether or how those ownership responsibilities were exercised.”
Link to report
The Canadian Shareholder Association for Research and Education (SHARE) and FundVotes have published their second annual report looking at Canadian mutual fund voting practices. Amongst other findings, it reveals that funds are more likely to vote against re-election of board directors this year than in previous years.
Link to report
Almost half (49%) of all UK pension funds intend to spend more time investigating the actions of their fund managers on engagement issues. In its 2009 Engagement Survey, The National Association of Pension Funds (NAPF), whose members run £200bn (€235bn) in assets, said three quarters (78%) would review the reporting provided to them by their managers, which 56% felt could be improved. Just under two thirds (57%) said there would be increased attention on manager proxy voting. The survey found that in addition to voting at UK company meetings, 93% of UK funds responding exercised voting rights in the US, 88% did so in Europe, 69% voted in Japan and 57% voted emerging markets shares. David Paterson, head of corporate governance at the NAPF, said: “Our survey demonstrates that pension funds are increasing their focus on engagement policies. They have an inherent interest in the companies in which they invest being run well given their long-term objective of being able to meet the pension promises of their members.” However, he said there was “more work to be done to ensure that pension funds improve the effectiveness of their oversight of both their investment managers and the companies in which they invest.”
ECOFACT, the Swiss ESG and risk data consultancy has signed a marketing and research partnership in Asia with Responsible Research, the independent Asia ESG research provider.

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