RI Governance & Engagement, Dec. 22: New York City funds hold big banks to account

RI’s regular review of governance and engagement news

New York City Comptroller John Liu and the NYC pension funds have called on the boards of J.P. Morgan, Goldman Sachs and Morgan Stanley to hold senior executives financially accountable for losses that result from excessive risk-taking or improper or unethical conduct. The funds filed shareholder proposals at the banks as they are among the largest and have each come under scrutiny for improper practices leading up to the financial crisis. “No one should profit or be rewarded with bonuses when engaged in improper or unethical behaviour,” Comptroller Liu said. Link

The Indian cabinet is expected to shortly approve the country’s Lokpal anti-corruption bill and then table it for vote, according to reports. The Lokpal bill envisages setting up an independent ombudsman who would have the power to investigate and prosecute politicians and civil servants.

Governance research house GMI has added listed real estate investment trust General Growth Properties to its GMI Risk List, where former CEO Adam Metz, brought in to wrest the company out of bankruptcy, is among the top 10 highest-paid CEOs in the US. GMI gives the company an “F” rating.

Thailand’s Institute of Directors has said that corporate governance for Thai-listed companies dipped to an average rating of 77% in 2011, compared with 80% in 2010, according to a report in the Bangkok Post. The study surveyed 497 companies listed on the Stock Exchange of Thailand and Market for Alternative Investment.

Investor activist James McRitchie has filed a shareholder proposal at tech giant Apple calling for an annual non-binding vote on outside director compensation. “Some of our directors are paid more than $1m for work that may take less than 400 hours per year—or $2,500-plus per hour,” he said in his blog. Apple will hold its 2012 annual meeting in February.The 10th annual China Corporate Governance Forum took place in Shanghai this week to mark the 21st anniversary of the Shanghai Stock Exchange (SSE). It was sponsored by the SSE under the auspices of the State-owned Assets Supervision and Administration Commission (SASAC) of the State Council and the Organization for Economic Cooperation and Development (OECD). Link

SVG Capital, the listed private equity firm, is considering “bolt-on acquisitions” for its activist fund management arm SVG Investment Managers, according to a company announcement. “We will continue to invest in this business in a disciplined manner to support growth and build scale, both by acting as general partner and taking advantage of market opportunities to make bolt-on acquisitions,” it said.

Proxy research firm ISS, Institutional Shareholder Services, is to release a new version of its two-year-old Governance Risk Indicators (GRId) measure. The initial launch in February 2012 will include content and methodology updates for the US, with updates to other markets, and coverage of new markets in Europe and Asia-Pacific to follow in the third and fourth quarters. “GRId 2.0 represents a next step in the evolution of governance ratings,” it says.

The National Association of Pension Funds, the UK investor body, has published its latest corporate governance policy and voting guidelines, to apply to the 2012 annual general meeting (AGM) season. Changes relate to the Stewardship Code, board diversity and directors’ skills and experience. Link

Law firm Davies Ward Phillips & Vineberg has produced a report — Davies Governance Insights 2011 — that looks at the governance trends, practices and board profiles of the 360 Canadian issuers on the S&P/TSX Composite and S&P/TSX SmallCap indices, and identifies the trends that are expected to shape the 2012 proxy season.