RI Governance & Engagement, September 8

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

Remuneration and capital structure are the resolutions that attract most consistent shareholder dissent, according to a working paper from the Organisation of Economic Cooperation and Development (OECD). “The Exercise of Shareholder Rights: Country comparison of turnout and dissent” by Paul Hewitt uses data commissioned from proxy voting advisory firm Manifest Information Services. “We highlight on the back of this report that disclosure is the most fundamental concern,” Hewitt concludes. Link

A Cleveland union pension fund has lost its appeal against the rejection of a class action suit against American Express Co. The $248m Local No. 38 International Brotherhood of Electrical Workers Pension Fund had claimed that the company had misled investors in the run-up to the credit collapse. The Court of Appeals for the Second Circuit in New York said the fund’s arguments are “without merit”. Link

The European Commission will reportedly make a proposal for introducing country-by-country reporting (CBC) of financial information for extractives industries and possibly forestry companies at some point this autumn. It follows an EU Council request earlier this year.

The IFC, the World Bank’s private sector arm, has released a compendium of its collective knowledge and experience of designing and implementing corporate governance projects around the world. The 188-page Track Record: Lessons from IFC’s Corporate Governance Experience provides first-hand accounts from staff in the field and reflects “the evolution of our project approach with changing world events”.

NYSE Euronext’s ‘Corporate Board Member’ publication has launched a survey showing that the Dodd-Frank Act, “while well-intentioned, is contributing to governance gridlock and increased liability”. The Corporate Board Member/FTI Consulting 2011 Legal Study is available here*The economic consequences* of switching to majority voting in company director elections in the US is investigated in a new academic study. Does the Director Election System Matter? has been put together by Yonca Ertimur of Duke University and Fabrizio Ferri of Columbia University.

Executive pay will rise in 2012, according to 79% of “senior reward professionals” in FTSE 350 companies surveyed by consulting firm PricewaterhouseCoopers. “One of the biggest causes of shareholder concern has been bonuses paying out even when company performance has been disappointing, as was sometimes the case in 2010,” said PWC partner Sean O’Hare. “Toughening up executives’ targets and ensuring they reflect business strategy has become a major focus.”

The Conference Board, the New York-based business membership and research association, has published a report on the separation of chair and chief executive roles. The study, by Richard Leblanc and Katharina Pick, is available here

A group of 29 impact investors including asset managers, development finance institutions and institutional foundations, has signed a letter of support backing the
the Global Impact Investing Network’s (GIIN) Impact Reporting and Investment Standards (IRIS) initiative. It follows the first release of IRIS performance data released by the GIIN, titled Data Driven: A Performance Analysis for the Impact Investing Industry.
Link to IRIS