RI Governance & Engagement, May 6: Stewardhip Code covers 40% of UK AUM

RI’s regular review of governance and engagement news

The UK’s Stewardship Code is now well on its way to critical mass says Chris Hodge, Head of Corporate Governance at the Financial Reporting Council. He said the 120 asset managers who have signed up so far represent around 40% of the assets under management in the London market. But he told a seminar organised by PIRC: “The real key is to get the asset owners to engage with this. Our task now is to mobilize and engage with the owners.”
MSCI’s governance segment operating income declined 34.2% to $2.8m in the first quarter from a pro forma $4.3m a year before, according to the company’s latest earnings report. Governance revenues declined $1.1m, or 3.5%, to $31.3m.

Companies including 3M, ConocoPhillips and Eastman Kodak are set to face questions from the floor over their backing for the US Chamber of Commerce at their forthcoming shareholder meetings. Tim Smith, Walden Asset Management’s Director of ESG Shareowner Engagement, is planning to “hold their feet to the fire” according to one observer.

SHARE, Canada’s Shareholder Association for Research and Education, corresponded with 45 companies on key environmental social and governance issues in the first three months of 2011. Its new quarterly report said the thematic focus “was on climate risk disclosure, executive compensation (say on pay), precarious employment, human rights, hydraulic fracturing and sustainable forestry”.

The board of Commerzbank, the German bank, was due to face a vote of no confidence tabled by a shareholder at its annual meeting in Frankfurt today (May 6). “Over the last four years, the Board of Managing Directors has completely gambled away the responsibility for the shareholders’ funds which have been entrusted to it,” the motion, from Riebeck-Brauerei von 1862 AG states. AGM agenda*Finnish energy groups Neste Oil and Fortum* have both set up informal Stakeholder Advisory Panels. Neste said of its eight-strong group that it is “one of the Company’s means to discuss subjects such as Neste Oil’s operations, business development, and changes in its operating environment with its stakeholders”.

Swiss pharmaceutical group Actelion has survived an attempt by activist investor Elliott Advisors to oust its management at its annual general meeting, according to the Financial Times. Actelion had been supported by Ethos, the Swiss pension-fund owned shareholder advisory firm.

British Columbia Investment Management Corporation and Canada Pension Plan Investment Board, the giant Canadian pension funds, are calling for European Goldfields Ltd. to adopt a majority voting policy at its AGM next week. The Toronto-listed mining company, which has not made a voting recommendation to shareholders, holds its meeting on May 13.

A shareholder proposal on adopting a simple majority vote at Internet auction giant eBay won 66% support, according to this blog post. eBay, which had opposed the motion, held its annual meeting on April 28 in San Jose, California.

The Australian Securities Exchange has published its 2010 Share Ownership Study. It found that approximately 7.26m people, or 43% of the adult Australian population, own shares. This is up from 6.72m (41%) two years previously.

Canadian shareholder group MEDAC (Mouvement d’éducation et de défense des actionaire) is calling for dual share class conglomerate Power Corporation of Canada to adopt rules to ensure the influence of minority shareholders. The company has its annual meeting on May 13.