RI Governance & Engagement, Oct. 6: Pension case vs. ratings agencies gets go-ahead

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

A class action case brought by US pension fund investors against ratings agencies in the wake of the subprime mortgage crisis has been given the go-ahead. In a rare move, Albuquerque federal court judge James Browning denied the agencies’ motion to dismiss the investors’ claims. The case was brought by the Genesee County Employees’ Retirement System, the Maryland-National Capital Park & Planning Commission Employees’ Retirement System and the Midwest Operating Engineers Pension Trust Fund. Link

US consumer products giant Procter & Gamble is facing a shareholder proposal on its election contributions at its annual shareholder meeting in Cincinnati on October 11. Boston-based Northstar Asset Management has tabled the motion, which the company’s board is opposing. Proxy
The £1.2bn (€1.4bn) Wiltshire Pension Fund in the UK is to sign up to the Financial Reporting Council’s Stewardship Code, according to County Council meeting documents.
Singapore: the new Stewardship and Corporate Governance Centre (SCG) was officially launched last month – with backing from state investor Temasek, according to Channel News Asia. The move follows tighter governance rules from the Singapore Exchange and proposed changes to the Institute of Directors’ code of corporate governance, it said.

The inaugural Shareholder Democracy Summit will be held in Toronto later this month. The event is being organised by the Canadian Society of Corporate Secretaries on October 24-25 and includes speakers from the Canadian Coalition for Good Governance, the Canadian Institute of Investor Relations, RBC Dexia, the Ontario Securities Commission, as well as participants from the US and international markets. Link

The Center for Political Accountability, the US campaign group, and its shareholder partners are urging 423 companies to adopt political spending disclosure and accountability before the 2012 proxy season — and thereby avoid facing a possible shareholder resolution. In addition the CPA and the Wharton School’s Zicklin Center for Business Ethics Research are set to unveil the innovative C-Z Index, which rates companies for the quality of their political disclosure and accountability practices.The Minneapolis Firefighters’ Relief Association and the Hawaii Laborers Pension have had their lawsuit against US medical products firm Johnson & Johnson thrown out. Their consolidated shareholder derivative litigation had sought redress over J&J’s drug marketing, which judge Freda Wolfson acknowledged was “serious corporate misconduct”. But she dismissed the case as there was no evidence to implicate individual board members. It’s “virtually impossible to hold corporate board members accountable through shareholder litigation” says legal commentator Alison Frankel.

UK fund firm F&C Asset Management has named Edward Bramson as Executive Chairman, to take over from CEO Alain Grisay who is to retire. Bramson, who took over as chairman after a boardroom battle earlier this year, will hold the role at the £108bn (€119.6bn) asset firm for an interim period. F&Cs own corporate governance guidelines state that the roles of chairman and CEO “should be separated”.

New York State Comptroller Thomas DiNapoli, the trustee for the $146.9bn New York State Common Retirement Fund, has called again for oil major Chevron to settle its long-running Ecuador oil pollution litigation. “Chevron must do what’s right for its investors, and its future viability, by negotiating a fair settlement that restores the company’s reputation,” he said in an article in the Huffington Post.

Socially responsible investing specialist the Christian Brothers Investment Services, has announced it will oppose the re-election of members of the News Corp. board over the phone hacking scandal, in addition to presenting a floor motion at the company’s frothing AGM. “The very concept of good corporate governance demands that News Corp. shareholders vote against the re-election of members of the company’s board, including Rupert Murdoch as Chair,” said CBIS’s Julie Tanner.

Campaign group Transparency International has called for strengthened shareholder democracy to be part of more effective governance of the European banking sector. “Shareholders, other market participants and the wider public also have a role in monitoring and enforcing governance arrangements if the right information is disclosed Public disclosure the key to more effective bank governance,” it said ahead of a European Parliament debate on the issue.