Tuesday, 27 October 2009

Voting disclosure - nearly there?

I know this is a bit of a hobby horse of mine, but I've been reading through the submissions to the Walker Review looking to see what sort of of responses there have been to the recommendation on voting disclosure. It's recommendation 22, and it reads as follows:
“Voting powers should be exercised, fund managers and other institutional investors should disclose their voting record, and their policies in respect of voting should be described in statements on their websites or in other publicly accessible form.”
Effectively it just restates best practice, since the ISC has already said (just about) that public disclosure is desirable. But the lack of detail in support of this recommendation does seem to leave the door open to making it mandatory, which obviously I support.

Anyway, I had a trawl through the submissions and found that actually of those that comment specifically on this recommendation, a majority are supportive (and a fair few explicitly call for mandatory public disclosure). A handful appear openly hostile - not surprisingly the IMA and AIC are not supportive - with a few more ambivalent (the ABI and L&G suggest it's a waste of time). So the debate seems to have shifted failry decisively in favour of public disclosure.

A final point. I think we do need to tackle this 'no-one is interested in the data' argument head on. In my opinion, as one of the handful of voting data geeks out there, the amount of legwork involved for an ordinary punter to find out anything useful is the problem. Voting data can be hard to locate - it isn't always where even someone like me would expect to find it.

The format it is disclosed in can also make it very difficult to understand - I've just been looking at one manager's disclosure and it doesn't even tell you what the resolutions are, so unless you have the AGM agenda to hand all you know is that they voted against 'resolution 10' and for the rest. Not exactly illuminating.

And, most importantly, if you really want to take an informed view you need to compared your manager's voting against the rest of the industry. In other words you need to repeat the search for data perhaps dozens of times. Only a handful of sad people are going to bother :-)

If we make disclosure mandatory, and define the format of disclosure, it will be much easier to carry out comparative analysis. Someone geeky like me can go and get all the data and bung it in a survey for you. Or put it on a website, a sort of Confused.com for voting.

At the moment voting data is disclosed in a way that suits asset managers, rather than the punters, and it requires a large amount of effort to make sense of it. But if we make it easier for people to interpret the data I'm confident the interest will grow.

No comments: