Saturday, 12 November 2011

Excellent union initiative on shareholder voting

The latest initiative by the Committee on Workers' Capital is excellent. There are now three markets - US, UK and Canada - where TUs carry out annual analysis of asset manager voting. As far as I am aware they were the first people to do this in each market, for which the US unions in particular deserve great credit, having come up with the idea. Now the CWC, which brings together TU people interested in such things from around the world, has taken the logical next step and put out a global survey.

Here's the blurb:

The Global Unions Committee on Workers’ Capital (CWC) announces the publication of its report: Proxy Review 2011. The report encourages investors to take an active role in proxy voting oversight.

Proxy Review identifies trend-setting shareholder votes on social, environmental and corporate governance issues that are relevant for pension investors with global equity portfolios. The report includes key votes from: Australia, Canada, Spain, Switzerland, the United Kingdom and United States of America.

Shareholder voting is one of the primary means by which investors can influence a company’s operations. It is therefore important for shareholders to participate in the voting process. However, pension equity investments can span hundreds of companies and numerous countries. Add to this complexity, regulatory differences, conflict of interest problems, agency dilemmas and narrow interpretations of fiduciary duty, which all contribute to accountability gaps along the investment chains of pension funds. Recognizing these gaps, Proxy Review was created to serve as an accessible resource for pension trustees who would like to evaluate how key proxy votes in international portfolios were cast on their behalf.

Ken Georgetti, Chair of the CWC and President of the Canadian Labour Congress said, “At the height of the global financial crisis, institutional investors were accused of failing to actively oversee corporate governance and risk management practices at the companies they own. This report will help the pension fund trustees who invest workers’ retirement savings overcome barriers in exercising such oversight. As our Proxy Review project demonstrates, creating the opportunity for dialogue between trustees and their investment managers is one important way the Committee on Workers’ Capital is tackling serious accountability deficits within global investment chains.”

The selected key votes in Proxy Review 2011 focus on corporate governance issues, though environmental and social issues are also highlighted. Among the issues addressed are the independence of Board members, CEO succession planning, executive remuneration and compensation, pay-ratio disclosure, sustainability reporting and disclosure of policies on labour and human rights standards.

These votes were cast at major global companies that represent a wide range of industry sectors. Companies include: Rio Tinto, Barrick Gold, Banco Santander, Nestlé, Credit Suisse, Novartis, UBS, BP, Hewlett Packard, Apple, Chevron, Shell, JP Morgan Chase and Bank of America.

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