RI Governance & Engagement, Oct. 13: Pension suit over Goldman pay gets thrown out

RI’s regular roundup of governance news

A suit brought by US investors the Southeastern Pennsylvania Transportation Authority and the International Brotherhood of Electrical Workers Local 98 Pension Fund against Goldman Sachs has been dismissed. They had alleged the investment bank’s pay structure led management to pursue a highly risky business strategy. It was thrown out by Delaware Chancery Court Judge Sam Glasscock yesterday (October 12), who said Goldman’s directors didn’t violate their fiduciary duty but “made bad decisions”.

News Corp., the media giant facing pressure from investors over the phone hacking scandal, is included in the new ‘Risk List’ from research firm GMI Ratings. There is “ little indication that the quality of the company’s governance is improving – particularly in the crucial area of the relationship between the board and [founder Rupert] Murdoch,” GMI says. Investors may be vulnerable to further fallout from weak board oversight in the future, it adds. Link

Canadian funds firm NEI Investments has published its 2012 Focus List. As a signatory to the Forest Footprint Disclosure Project, it will encourage firms with exposure to commodities like soy, palm oil, timber, cattle products and biofuels to assess their impact on forests around the world. And it also aims to ensure that pharmaceutical companies like Pfizer and Johnson & Johnson do more to fund research into neglected tropical diseases. Link

Dutch corporate governance foundation Eumedion is currently preparing its annual ‘spearheads’ letter to Dutch listed companies. The focus this year is on external auditors and on how companies are preparing for potential recession next year, Executive Director Rients Abma said at the ESG Europe conference.

A survey from J.P. Morgan has found that institutional investors in North America and Europe believe that investor relations and corporate governance standards in Latin America have improved. The poll was conducted in June and July of 2011, and gathered the opinions of 40 institutional investors which combined hold approximately $57.3bn of actively managed equity in Latin American companies.A credit-crisis related class action case brought by the International Union Of Operating Engineers – Employment Construction Industry Retirement Trust against investment bank UBS Securities has been thrown out, according to reports. Law360 reported that the case, which turned on the pension fund’s losses from a $5m purchase of mortgage-backed securities, has been dismissed by a New Jersey federal judge.

The Cranfield School of Management has published its latest UK government-commissioned report into women on boards. “In the six months since Lord Davies launched his independent review into women on boards, only 33 FTSE 100 companies have heeded his recommendation to set themselves targets for the number of women they aim to have on their boards,” it said. “Of these 33, only ten have set themselves targets of greater than a 10% increase.”
The Canadian Coalition of Good Governance has released new guidelines entitled “Governance Differences of Equity Controlled Corporations”. CCGG says many large Canadian corporations are controlled by a family, a parent company or a group of shareholders through their holdings of common shares – and that effective equity control can come from holding as little as 20%.
BNY Mellon Shareowner Services has launched its Mobile Proxy Voting service, which allows clients to vote via smartphones, tablets, and other Web-connected mobile devices. Its first the first of a series of new products in the pipeline, BNY Mellon said.

The governance of institutional investors is the topic of new academic research. Are Institutional Investors Part of the Problem or Part of the Solution? is by former GE vice president for law and public affairs Ben Heineman and Stephen Davis, Executive Director of Yale University School of Management’s Millstein Center for Corporate Governance and Performance. The idea that institutional investors “can and will police the market with new powers and responsibilities” rests on “unexamined and unsophisticated assumptions” they argue.

Frontis Governance, an independent proxy advisory firm based in Rome, has joined the Expert Corporate Governance Service (ECGS) as Italian partner.