RI Governance, February 16: Co-operative AM presents case study of Murdoch engagement

RI’s regular round-up of governance news

The Co-operative Asset Management, the UK-based funds firm, has described how it has engaged with Rupert Murdoch’s News Corp. over the years. The case study, “Murdoch Myopia – Short-sighted governance”, appears in TCAM’s latest engagement report. Link

Three of the UK’s largest pension funds are set to join a lawsuit against directors of banking group Lloyds TSB for misleading investors about its takeover of Halifax Bank of Scotland, according to a report in Professional Pensions. It said shareholder group Lloyds Action Now is close to filing a case at the High Court.
Proxy firm Glass Lewis has teamed up with executive pay research firm Equilar “to provide institutional investors and corporate issuers with enhanced analysis of executive compensation and corporate governance matters”. They will give more details in a webinar on February 22. Announcement

The Conference Board business group and financial data firm FactSet Research have set up an initiative to “analyze and disseminate” aggregate data from US company annual meetings. Their new ‘Proxy Voting Report’ will be an annual publication aggregating voting results and other information on proxy contests, proposal volume, proposal topics, and sponsorship types. Link

The Swedish Corporate Governance Board has commented on the corporate governance aspects of the European Commission’s proposed revision to the MiFID directive, which covers Markets in Financial Instruments. The board rejects MiFID II’s requirements for board diversity at investment firms. Link

NEI Investments, the Canadian mutual funds firm, has agreed to withdraw a shareholder proposal on the disclosure of measurable performance targets at the Royal Bank of Canada, the bank said. RBC, which holds its annual general meeting on March 1, faces four resolutions from shareholder group Mouvement d’éducation et de défense des actionnaires (MÉDAC) and others. Link

UK Prime Minister David Cameron has suggested that mandatory quotas of female board representation are a possible option if companies do not pursue diversity themselves. Cameron said: “The evidence is that there is a positive link between women in leadership and business performance, so if we fail to unlock the potential of women in the labour market, we’re not only failing those individuals, we’re failing our whole economy.”New research from Swiss business school IMD has uncovered “consistent evidence” that good corporate governance is recognized and rewarded by the markets. “It’s generally assumed good governance has to be imposed or recommended from the outside because the costs are greater than the benefits,” said co-author Professor Arturo Bris. “Our study demonstrates this isn’t necessarily the case – in fact, the voluntary adoption is rewarded almost immediately by the markets.” Link
The number of shareholder resolutions voted on in France continued to fall to just 12 in 2011 after dropping from 62 to 24 between 2009 and 2010, according to the annual study on general meetings by Proxinvest, the Paris-based proxy voting company. The number of resolutions rejected by company boards which reached a record of 64 in 2010, fell back slightly to 44 rejected proposals in 2011. These included the first French environmental resolution lodged by Phitrust Active Investors requesting more information on the exploitation of oil sands in Alberta, Canada, which was rejected by the Total board. The average vote in favour of the resolutions lodged at France’s biggest CAC40 listed companies was 5.9% and slightly lower at 4.79% at companies of the SBF 250 smaller cap index.
The $133.8bn (€102.6bn) New York State Common Retirement Fund has withdrawn a shareholder proposal on workplace rights it filed at industrial group Leggett & Platt after the company agreed to set up a supplier code of conduct, according to a report in Pensions & Investments.

Western Union, the New York-listed money transfer company, says it will include a management proposal to eliminate its current classified board structure at its forthcoming annual meeting. It also no longer intends to submit its proposal to implement a “form of proxy access”. Western Union is one of the companies that targeted on ‘proxy access’ [director nomination] by Norges Bank Investment Management. Link

US computer giant Hewlett-Packard Co. has agreed to allow shareholders more rights to remove its board members. HP will give its investors the opportunity to approve proxy access through a bylaw vote at its 2013 annual meeting, the Wall Street Journal reported.