RI Governance, Feb. 9: Finland’s Ilmarinen appeals ‘minimum dividend’ judgment (update)

RI’s round-up of governance and engagement news

Updated to include Ethos’ Novartis recommendation

Finnish pension insurance giant Ilmarinen is appealing to the country’s Supreme Court against the latest judgment in its long-running ‘minimum dividend’ claim against Finnlines. The Helsinki Court dismissed Ilmarinen’s claims against the shipping operator in November last year. Link

Ethos, the Swiss proxy advisor, has urged Novartis’ shareholders not to approve the re-election of William Brody and Srikant Datar at the company’s annual general meeting on 23 February 2012 – “given that shareholders cannot vote on the remuneration system this year”. Ethos said: “These two directors are members of the remuneration committee that did not make any change in the remuneration structure, despite opposition by 39% of shareholders at the 2011 general meeting.”
A lawsuit brought by a group of five leading pension funds against Bank of America relating to its acquisition of Merrill Lynch at the height of the financial crisis has won class action status. Class certification means plaintiffs can cut costs and can lead to larger recoveries. The investors – the Ohio Public Employees Retirement System, the State Teachers Retirement System of Ohio, the Teacher Retirement System of Texas, the Netherlands’ PGGM and Swedish state fund Fjarde Ap-fonden (AP4) – allege the bank misled them about its 2008 acquisition of Merrill. The funds launched the case in 2009.

US investors will today accuse consulting firm Accenture, at its AGM in New York, of espousing sustainability values while not speaking out about them as members of the US Chamber of Commerce, which the investors say has become increasingly political in its corporate lobbying. In a message read on behalf of Steve Viederman of the Christopher Reynolds Foundation, Timothy Smith, Director of ESG Shareowner Engagement of Walden Asset Management, said there was a sharp contrast between the statements in Accenture’s citizenship report, its public policy positions and those of the Chamber and the National Association of Manufacturers (NAM) on whose boards Accenture sits. It is the second year that investors have tried to push Accenture on the issue.

Broadridge Financial Solutions, the investor communication and securities processing firm, and Institutional Investor Advisory Services India (IiAS), have announced an alliance for the sale and distribution of IiAS proxy research and vote recommendations for listed Indian companies through Broadridge’s ProxyEdge voting platform. Separately, Broadridge has reported an increase in second quarter fiscal year revenues. They were up 8% to $480m, from $442m a year before. Link*CalSTRS, the $144.8bn California State* Teachers’ Retirement System, has written to Facebook founder Mark Zuckerberg on the firm’s governance structure. “We are disappointed that the Facebook board will not have any women members,” Anne Sheehan, CalSTRS’ Director of Corporate Governance Anne Sheehan wrote. “It seems paradoxical that it should adopt such a centralized, old business governance structure.” Link

“Apple needs a governance upgrade,” says Anne Simpson, senior portfolio manager at the $231bn California Public Employees’ Retirement System. CalPERS is seeking shareholder support for its proposal to have unopposed board candidates at the tech giant. Simpson said: “An overwhelming 73% of shareowners supported this same proposal a year ago, and we’re once again calling on Apple to listen to its shareowners.” Apple holds its AGM on February 23.Link

Moxy Vote, the US shareholder engagement platform which recently announced that it has reached 100,000 users, says it has been chosen by Johnson & Johnson to communicate with its retail shareholders. “Through Moxy Vote, Johnson & Johnson will offer their individual shareholders the ability to vote their proxies and receive important information from the company,” Moxy Vote said.

Some 66% of independent shareholders opposed the remuneration report at UK-listed TUI Travel’s annual general meeting in London this week, according to calculations. The report was opposed by 20% of votes – but the company is 55% owned by Germany-based TUI AG, and only 86% of total eligible votes were cast.

Investors including the Boilermakers Local 154 Retirement Fund have sued Franklin Resources, the global fund firm which operates as Franklin Templeton Investments, and eight other firms including Chevron Corp., for adopting anti-shareholder litigation bylaws. The bylaws require common types of shareholder lawsuits be brought exclusively in Delaware Chancery Court. Such ‘exclusive forum’ moves are seen as a way to control shareholder litigation. Link