RI Governance, February 23: South African state investor takes stand on exec pay

RI’s regular review of governance and engagement developments

The Public Investment Corporation, the state-owned South African investor with some R1trn (€97bn) under management, is taking a stand on executive pay, according to a Moneyweb report. Acting chief executive Daniel Matjila told the publication that PIC had voted against remuneration policies at retailer JD Group and industrial group Reunert.

The Monetary Authority of Singapore has proposed extending its Corporate Governance framework to all direct insurers and reinsurers incorporated in Singapore. Under the plan, at least a third of insurers’ boards will have to be independent directors.

The 12th Canadian Key Proxy Vote Survey, a project of the Columbia Institute, Fonds de solidarité (FTQ) and the Shareholder Association for Research and Education (SHARE), has been released. It examines the voting records of 32 investment managers and proxy voting services who reported combined Canadian equity holdings in excess of C$130bn (€98bn) in 2011. Link

The $146.6bn California State Teachers’ Retirement System says the recent arrest of journalists at UK tabloid The Sun “escalate the pressure” to make governance changes at parent company News Corp. Anne Sheehan, CalSTRS’ head of corporate governance told the Sunday Telegraph: “They’ve heard us but we’re looking forward to seeing action.”

Ownership Matters, the new Australian governance advisory business set up last year by Dean Paatsch, Martin Lawrence and Simon Connal, has released new research on how many company remuneration reports were rejected by shareholders in 2011. Just two firms, Crown and Pacific Brands, saw their remuneration report resolutions defeated in 2011 – down from nine in 2010. Link

Canada’s NEI Investments and Vancity have tabled a resolution for energy firm Enbridge’s forthcoming shareholder meeting. It calls for a report on how the company will factor in First Nations’ opposition to its Northern Gateway oil pipeline project. Enbridge holds its AGM in Toronto on May 9.Norges Bank Investment Management (NBIM), manager of the Norwegian Government Pension Fund, says it will sponsor the Asian Corporate Governance Association (ACGA). NBIM joined ACGA as a member in 2008 and is the association’s first so-called Foundation Sponsor. “As a major investor in the region we have a long-term interest in corporate governance and the fair and efficient functioning of capital markets in Asia,” says Anne Kvam, NBIM’s global head of ownership policy.
Separately, Norges has welcomed governance changes at Dallas-based energy firm Pioneer Natural Resources Co. following engagement with the company. “Pioneer, after discussions that we had with them, have done some major governance improvements,” the fund’s Anne Kvam told Reuters. Pioneer was one of the six US firms NBIM was targeting on the ‘proxy access’ issue.

Swedish state fund Sjunde AP-fonden (AP7), has named Institutional Shareholder Services (ISS) as its proxy voting provider. The tender had been launched in mid-2011. Link (Swedish)

The Australian government plans to require listed companies to disclose to shareholders – through the remuneration report – steps they have taken to claw back bonuses and other pay if there’s a “material misstatement” in financial statements. Companies “run the risk of shareholders recording a ‘strike’ against them at their annual general meeting when they vote on the remuneration report” said Parliamentary Secretary to the Treasurer, David Bradbury. Announcement

French financial regulator, the Autorité des marchés financiers (AMF), has published the report of the high-level working group looking at listed companies’ annual shareholder meetings. The report is open to public consultation until March 7. Link

The Dutch Parliament has approved a bill forcing companies to change their auditors every eight years, according to Institutional Shareholder Services. And the auditor may not provide non-audit services to the company.