RI Briefing, January 12: Ontario reviewing shareholder democracy

RI’s regular Wednesday round-up of resposible investing news

The Ontario Securities Commission is considering regulatory proposals on shareholder democracy issues. It is seeking public comment on shareholder advisory votes on executive compensation and the effectiveness of the proxy voting system. The deadline for comments is March 31. Announcement

Muzinich & Co, the corporate credit asset manager which launched a socially responsible high yield fund in 2009, is among several new signatories to the United Nations Principles for Responsible Investment. Other newcomers include private equity firm EQT, State Street-ABP owned emerging markets specialist Rexiter, Denmark’s Jyske Bank and Jyske Invest, Finland’s Aktia Bank and eQ Asset Management, Canadian water specialist XPV Capital, infrastructure firm Meridiam and French private equity firm Abenex Capital.

Think tank and consultancy AccountAbility has released the final ‘exposure draft’ of the Stakeholder Engagement Standard AA1000 for public comment. The consultation period, which closes on February 7, is the final phase of the revision process. Link

The Canadian Coalition for Good Governance, the institutional investor representative, has thrown its weight behind the idea of a national securities regulator. It’s “the best way to protect all Canadian investors and to have efficient and effective Canadian capital markets” says CCGG Executive Director Stephen Griggs in an opinion piece.

A group of seven major US public pension funds – with combined assets of $432bn – have called on bank boards to undertake independent examinations of their mortgage and foreclosure practices. The group, led by New York City Comptroller John Liu, has $5.7bn in the four banks under scrutiny: Bank of America, Citigroup, JPMorgan Chase, Wells Fargo. Release

Credit Suisse and CSR Asia have released a study – Strategic Philanthropy: Unlocking Entrepreneurial Potential – which looks at how ultra-high net worth individuals can make their philanthropy “more strategic and sustainable”.The Society of Corporate Secretaries and Governance Professionals, the US professional association, has issued a broadside against proxy advisory firms. In a letter to the Securities and Exchange Commission, it states: “In our experience, proxy advisory firms generally do not truly analyze and apply their policies on a case by case basis either; instead, proxy advisory firms in most cases apply a kind of check-the-box or “one-size-fits-all” analysis.” It would support rules requiring proxy firms to be registered with the SEC. Website
MSCI’s Institutional Shareholder Services has announced a tie-up with corporate environmental, health & safety and sustainability community NAEM. NAEM will assist with ICS’s Sustainability Data Collection Forms and identify “Green Metrics that Matter”. Details

French financial regulator the AMF has suggested that non-financial rating agencies which provide information on corporate environmental social and governance (ESG) activities could be included in EU regulation covering rating agencies. The Autorité Des Marchés Financiers stated: “It would seem appropriate to reflect on a professional code or a regulation defining a few classical principles, such as the prevention of conflicts of interest, transparency or rigorous methodology. The explicit inclusion of non-financial rating agencies in the European Regulation on rating agencies could also be suggested.” Link

A survey released through Prince Charles’ Accounting for Sustainability Project has measured the state of accounting for sustainability in the UK, the US and Canada. A key finding of the report – Evolution of corporate sustainability practices – is that compliance with regulatory requirements remains the most common driver of business.

US companies are split on how frequently they should put their executive compensation programs to a nonbinding say-on-pay shareholder vote, according to a survey from consulting firm Towers Watson. Proposed SEC regulations require firms to conduct the first “say on when” votes in 2011.