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RI Governance, March 15: New York City funds in director nomination push at two firms

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

The $113bn (€86.4bn) New York City Pension Funds are calling on two of its investee companies, Chesapeake Energy and Nabors Industries, to allow shareholders to nominate director candidates (so-called “proxy access”). The funds have filed shareholder resolutions on the issues at the companies. They have withdrawn a proposal calling for Juniper Networks to repeal its classified board structures (where it received a 98% vote in 2011), after the company agreed to adopt the request.

PhiTrust Active Investors, the Paris-based activist investor has taken a majority stake in LC Capital, the €55m venture capital firm specialised in innovation technology. The fund manager said it was reinforcing its presence in ‘impact investing’. The combined firm will be called PhiTrust Impact Investors and invest in companies backing strong social and environmental technologies.

A report on the top 10 most controversial mining companies in 2011 has been published by RepRisk. The report is benchmarked against the United Nations Global Compact (UNGC) Principles and other international standards.

James Murdoch, Deputy COO, Chairman and CEO International at News Corporation, has written to a UK Parliamentary committee saying that he did not mislead Parliament over voicemail interception or alleged criminal wrongdoings at News International, its UK subsidiary. However, Murdoch said he took his “share of responsibility” for not uncovering wrongdoing earlier.
The UK Trades Union Congress (TUC) has challenged the government’s proposals to curb excessive executive pay – arguing that binding shareholder votes won’t work, but that putting employees on remuneration committees might. General Secretary Brendan Barber said: “While the proposals for a binding vote on future pay for directors and for raising the level of votes required for agreement to above 50% are sensible, the failure to allow workers to sit on remuneration committees means little is likely to change.” Link*Ann Yerger, executive director* of the Council of Institutional Investors (CII), the US investor group, says she is expecting some “pretty high vote totals, with some of these proposals passing” regarding resolutions on political spending in the forthcoming proxy voting season. “That is my bold prediction,” she said in an interview with C-Suite Insight.

The UK Institutional Investor Committee (IIC), which represents the country’s institutional trade bodies, has issued its preliminary views on the European Commission’s proposed regulation and amending directive on company and public entity audit requirements. The EU proposals aim to improve audits by addressing institutional investors’ concerns on the limited number of players in the market and the impact this can have on audit quality and reporting.

The state pension funds of Connecticut and Florida opposed the re-election of directors on entertainment giant Walt Disney’s governance and nominating committee, according to a report in Pensions & Investments ahead of the company’s annual shareholder meeting on March 13. In the event, just 57% of shareholders voted in favor of ratifying Disney’s executive pay.

More than two-thirds of US companies say that their executive pay is influenced by the voting recommendations of proxy voting advisors like Institutional Shareholder Services (ISS) and Glass Lewis, according to new research from the Conference Board, NASDAQ and Stanford University’s Rock Center for Corporate Governance. Most boards were likely to change CEO pay to gain a favorable “say-on-pay” recommendation. Link