Japan’s $1.3 trillion GPIF demands that asset managers disclose all their share voting decisions

Fund weighs in behind revised Japanese Stewardship Code.

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The $1.3 trillion Government Pension Investment Fund (GPIF), the world’s largest pension fund, has told its external asset managers to disclose their share voting records in a move to back recommendations made by the newly revised Japanese Stewardship Code published at the end of May in English: Link to Code

In a letter to managers dated June 8, GPIF told its asset managers to disclose details on their voting records for each investee company on an individual AGM agenda item.
It says the disclosure aims at working against conflict of interests.

The move is part of a toughening of corporate governance at the giant Japanese fund. Speaking last week in a keynote interview at the RI Europe conference in London, Hiro Mizuno, the GPIF CIO, warned asset managers that they would receive “smaller cheques” if they didn’t perform on corporate governance: Link to article

Norihiro Takahashi, President of GPIF, says: “GPIF believes that disclosure of details of proxy voting records is very much essential for institutional investors to fulfill their own stewardship responsibilities in order to deepen Corporate Governance reform and move its focus from “form” to “substance”, as Japan’s Stewardship Code revised on May 29, 2017 indicates.GPIF shall continue to enhance the mid- to long-term investment returns for our beneficiaries through improvement of corporate value and fostering sustainable growth of investee companies.”

“Disclosure of proxy voting records is very much essential for institutional investors”

To fulfill its stewardship responsibilities, GPIF not only monitors the stewardship activities of its asset managers, but also engages in active dialogue with them.

On 1 June, GPIF published five stewardship activity principles in Japanese that its asset managers are requested to comply with.
These include details on the corporate governance organization of asset managers, their management of conflict of interests, stewardship activities they need to pursue, items on ESG investments to consider, and points to consider when voting.

The English version of GPIF’s principles will be released next week.