RI Governance & Engagement, Nov. 3: €10bn UK fund tenders proxy voting

RI’s regular round-up of governance and engagement developments

The £8.6bn (€10bn) West Midlands Pension Fund is seeking tenders for a proxy voting service for its global equity holdings as well as corporate governance analysis and advice. “The fund intends to vote all of its direct equity holdings worldwide through this contract,” it says. The deadline for tenders for the five-year contract is December 19.

Canadian investment giant the Alberta Investment Management Corp. (AIMCo) says it will not accept what it called “vague plans” for board renewal announced by food group Viterra last month. AIMCo, which holds 17% of the company and is its largest shareholder, said shareholders would not tolerate “further platitudes about seeking shareholder input and closed door processes”. For its part, Viterra said it would not respond to AIMco’s press statements.

Formal board/shareholder engagement policies are beginning to emerge in the US, according to the new 2011 U.S. Director Compensation and Board Practices Report from The Conference Board. It is based on a survey of 334 public companies jointly conducted by The Conference Board, NASDAQ OMX, and NYSE Euronext. “About a quarter of surveyed companies adopt a board/shareholder communication protocol, with the highest percentage found in the financial sector (27%),” it said.

Southeastern Asset Management, the US-based investment firm with $29.9bn under management, has demanded that troubled Japanese Olympus give it access to board minutes concerning a series of controversial acquisitions. Southeastern, the largest non-Japanese shareholder in the imaging giant, made public a letter to the firm’s chairman and CEO this week.

The Hong Kong Stock Exchange has announced amendments to its Corporate Governance Code and listing rules, following a consultation period which ended on March 18. “The amendments will keep the Corporate Governance Code in line with international best practices,” the exchange said,

Institutional Shareholder Services, ISS, has extended the period for comments to its 2012 draft proxy voting guidelines to November 7. The move is in response to requests from institutional investors, corporate issuers and market intermediaries. Release*Companies from Russia and China,* who invested US$120bn overseas in 2010, are seen as most likely to pay bribes abroad, according to Transparency International’s 2011 Bribe Payers Index. It ranks 28 leading international and regional exporting countries by the likelihood of their firms to bribe abroad. Companies from the Netherlands and Switzerland are seen as least likely to bribe. Link

The Organisation for Economic Cooperation and Development, the OECD, is set to publish a study on the role of big investors in boosting governance at companies. The Role of Institutional Investors in Promoting Good Corporate Governance will be published on January 4 next year.

The 11th European Corporate Governance Conference is being hosted by the Warsaw Stock Exchange later this month. The three-day event starts on November 14 and features a video message from Michel Barnier, the European Internal Markets on the EU corporate governance framework. Link

The Bank of England’s Robert Jenkins has called for shareholders to take a stand on bankers’ pay. “It is time for shareholders to insist on a proper alignment of bank pay practices with the interests of their owners,” he said in an opinion piece for Reuters. Jenkins sits on the bank’s Financial Policy Committee.

Revenues at MSCI’s governance segment – the Institutional Shareholder Services business – declined by $1.5m, or 5%, to $28.8m in the third quarter, according to the company’s latest earnings report. Revenues related to index and ESG products increased $17.2m, or 20.4%, to $101.3m.

US trade union pension funds are reportedly considering a legal challenge to oil drilling company Nabors Industries’ planned $100m payout to its chairman Eugene Isenberg. Brandon Rees, deputy director of the AFLCIO Office of Investment, which has a $250m stake in the firm, was quoted by the Financial Times as saying it the development was “stunning”.

Brookfield Office Properties, the owner of the Zuccotti Plaza site of the Occupy Wall Street protests, hosts an investor day in Houston on November 14. The Plaza is named after co-Chairman John Zuccotti. Link