Campaign group calls for mandatory disclosure of institutional voting

Campaign group Fair Pensions has called for institutional shareholders to be forced to disclose how they vote at company annual meetings.

“Mandatory disclosure of voting activities by institutional investors, including the rationale behind significant decisions, would help to close the accountability gap between these institutions and ultimate providers of capital,” the London-based group said.

And it would like institutional investors to improve their communication with their beneficiaries and customers and provide “meaningful, specific” answers to their queries about shareholder rights.

It also encourages investors to respond directly to queries about how particular votes, rather than solely referring savers to their public disclosures.” The use of external service providers should not be a barrier.

Fair Pensions, which campaigns for major institutional investors to adopt responsible investment, also called for clarification of the status of abstentions, so thatcompanies can’t overlook them as ‘non-votes’, rather than a signal of investor disapproval.

These are the recommendations in a new report – The Missing Link – Lessons from the Shareholder Spring – into this year’s AGM season which saw corporate governance rise in prominence.

It comes as one of the major casualties of the shareholder spring – Aviva CEO Andrew Moss – has had his successor named today. The insurance and asset management giant named former AIA chief Mark Wilson to the role that was made vacant in the wake of a 58.6% vote against its remuneration report at its AGM this year.

“This research reveals that the government has handed additional powers to shareholders who are reluctant to use them,” said Fair Pensions CEO Catherine Howarth.

“People in the UK who are saving for a pension often have almost no way of accessing information on how their fund has voted on executive pay deals.” Fair Pensions hosts an event to launch the report in Parliament tomorrow.