RI Governance & Engagement, June 30: ISS in proxy voting deal with Deutsche Börse’s Clearstream

RI’s regular review of governance and engagement news

Institutional Shareholder Services has announced a deal to supply Deutsche Börse’s trade services arm Clearstream under which the ISS infrastructure will enhance Clearstream’s proxy voting services in Germany. The new service will be in place in February 2012, in time for next year’s proxy voting season, the pair said. Announcement

Calvert Investments and the Humane Society of the United States have welcomed pharmaceuticals company Allergan’s announcement that it has developed and had approved a new procedure that avoids using animals in testing Botox. Calvert and the HSUS had co-filed resolutions on the issue at Allergan shareholder meetings in 2008 and 2009.

The Canadian Coalition for Good Governance has expanded its board engagement program to 50 companies from 30 in 2009/10 and 13 a year before, according to its 2010-2011 annual report. The CCGG says the engagements have been “very informative” with many tangible results – with “ample evidence of improved board practices and proxy circular disclosure”.

SustainAbility’s Engaging Stakeholders network is to host a webinar on “open data”- the move towards making datasets freely available for public use and review – on July 20. It will explore what open data means for companies, sustainability reporting and stakeholder engagement. Email

The Oakland County Employees Retirement System and the Laborers’ District Council and Contractors Pension Fund of Ohio have reportedly filed a shareholder derivative lawsuit against US bank Wells Fargo. They claim the bank failed to address mortgage documentation issues, leaving it exposed to some $15bn of potential liabilities.

A shareholder proposal calling on Tokyo Electric Power Co. (TEPCO), the company at the centre of the Fukushima nuclear crisis, to withdraw from using atomic energy was voted down at the company’s turbulent shareholder meeting this week.
The FTSE 100 index provides a “cloak of respectability and lots of passive investors for companies that challenge the canons of corporate governance”, according to former FT Editor and Confederation of British Industry chief Richard Lambert, who helped launch the index in 1984. “Perhaps it is time for those responsible for the index to rethink its purpose,” he writes in the paper.Shareholders have voted down US companies’ say-on-pay proposals at just 37 firms (or 1.7% of the Russell 3000), according to ISS. Overall, eight S&P 500 companies and 29 Russell 3000 firms have failed to receive the required vote for approval of their executive pay programs.

The Global Reporting Initiative says 10 global firms will sponsor the next “G4” generation of sustainability reporting guidelines. Alcoa, Enel, GE, Goldman Sachs, Natura and Shell are supporting the GRI during the two-year development period while Deloitte, Ernst & Young, KPMG and PwC will add their expertise. Announcement

The World Bank’s IFC is providing corporate governance training to senior banking professionals from Bangladesh and other South Asian countries to help improve governance practices of banks and financial institutions. It has teamed up with the Bangladesh Enterprise Institute and the Bangladesh Institute of Capital Market to coach bankers from Bangladesh, Bhutan, Nepal, and Sri Lanka. Link

Proxy voting advisor Glass Lewis has backed fund manager Northwest & Ethical Investments’ call for Research in Motion to split the chairman and chief executive functions. The maker of the Blackberry handheld device, which says the proposal is “not in the best interest of the company or its shareholders”, holds its annual shareholder meeting on July 12.

A new report from corporate governance firm GovernanceMetrics International has found that shareholder activists “have had a great deal of success in pushing companies to stop using certain takeover defenses that undermine shareholder rights”. The report – “Proxy Season Wrap-Up: Successful Activism Dismantles Takeover Defenses” – is available here

The US Supreme Court won’t hear a pension fund class-action suit on drugs firm Eli Lilly’s marketing of its Zyprexa treatment for schizophrenia and bipolar disorder, according to Pensions & Investments. The suit had been brought by the Sergeants Benevolent Association Health and Welfare Fund and the UFCW Local 1776.

French proxy firm Proxinvest’s account of the stormy annual shareholders’ meeting at retailing giant Carrefour, where it recommended against voting for the reappointment of Chairman Amaury de Seze, is available here.