RI Governance & Engagement, August 11: Australian super funds release new governance guidelines

RI’s regular review of governance developments

The Australian Council of Superannuation Investors (ACSI) has released the fifth edition of its governance guidelines for listed Australian companies. There are new provisions for Board Workload, Board Evaluation, Voting by Poll, Pre- emptive rights and the Disclosure of Environmental, Social and Corporate Governance Policies and Practices. The guidelines were first developed in 2003.

Florida’s State Board of Administration has revealed that 21% of its proxy votes in the year to June 30 were against management, down from 26.1% in the previous year. And it added that a major initiative in 2011 was the expansion of internal voting responsibilities to include most of its externally managed global accounts. It emphasized the importance of governance issues such as majority voting and annual board elections “through extensive company engagement covering over 2,200 companies”. Link

A group of News Corp. shareholders with $24.7bn (€17.3bn) in assets under management have issued a statement calling on the media company to implement a series of changes in the wake of the phone hacking scandal. They group, who are members of the Interfaith Center on Corporate Responsibility and include Christian Brothers Investment Services, want an independent chair, more independent directors and the elimination of the company’s dual class share structure.

Elsewhere, Wespath Investment Management, the arm of the General Board of Pension and Health Benefits of The United Methodist Church with $17bn under management, asked to meet News Corp.‘s lead independent director on ways to restore investor confidence, according to a Bloomberg News report.

A new corporate governance code for small and medium sized firms in Dubai is set for launch on September 26. It has been developed by the government’s Dubai SME agency and regional governance body Hawkamah. The code will contain key principles and practices but will not be binding, they said in a statement.

The $445m Twin City Pipe Trades Pension Plan of St. Paul Minnesota is leading a shareholder suit against Internet firm Yahoo! relating to claims investors were misled about the restructuring of the online payment business of China’s Alibaba Group. The investors filed the complaint this week in US District Court in San Francisco, according to reports. Link*An intriguing ‘mock proxy battle’*, an interactive case study on shareholder activism, is to be staged later this month. The event, organised by the National Investor Relations Institute and the Society of Corporate Secretaries and Governance Professionals, takes place at Capital One Financial Corp. in McLean, Virginia on August 31. It features the fictional activist investor “Chumming Waters” in its attempt to gain board representation at “WidgeCo”. Among those taking part are Kenneth Bertsch, CEO of the Society of Corporate Secretaries & Governance Professionals, Mark Garofalo, Strategic Alliances Manager, ISS Corporate Services, Jennifer O’Dell, Assistant Director, Laborers International Union of North America (LIUNA) and Chris Cernich, Executive Director of M&A and Proxy Contest Research at ISS. Link

The £3.9bn (€4.4bn) Lothian Pension Fund recovered £167,000 from class actions settlements in the past year, according to its new annual report. Over the year its fund managers and advisors Hermes Equity Ownership Services, Baillie Gifford and Aberdeen Asset managers have been involved in “extensive engagement” with over 250 companies across the globe. The fund voted on over 11,000 resolutions at over 1,000 company meetings – opposing one or more resolutions at around a third of all meetings.

The Merseyside Pension Fund has tendered for a corporate governance advisor in a periodic review of suppliers; the incumbent is proxy firm PIRC, according to a report in Global Money Management.

The $146.5bn New York State Common Retirement Fund has announced a proposed $168m settlement of its securities fraud class action lawsuit against National City Corporation (National City) related to investment losses. “This is a good result for the Fund and the more than 1m fund members who rely on these investments,” said Comptroller and fund trustee Thomas DiNapoli. “And it sends a message that we will always fight to protect the best interests of our members.”

The Financial Services Authority, the UK regulator, has opened a consultation on “Dear CEO” letters providing guidance on remuneration issues. The background is the revised Remuneration Code which came into force on January 1 January, implementing the rules on remuneration contained in the EU Capital Requirements Directive. The consultation closes on September 2.