Thursday 19 July 2012

Voting disclosure bits and bobs

I've had a bit of interest in my recent blog on voting disclosure stats, so thought I'd follow up with a bit more detail.

We looked at all the asset manager signatories of the Stewardship Code, which was 175 at the time. On the best reading at that point, we classed 50 (29%) as disclosing. However of that 50 only 27 (15% of all Code signatories) disclosed a full record, ther rest either report only oppose votes and abstentions or just stats. I could run through the argument why disclosing only votes against or abstentions isn't good enough, but it's easier to just point to an example of an output under such as system. 

Also under the voluntary regime you get a major timelag in disclosures. Two of the biggest asset managers don't have any voting data on their websites later than Q2 2011, a third is at Q3 2011. This means that right now can only do a partial analysis of of voting in 2011 even based only on the minority that do disclose.

There are errors a plenty in disclosures too. One very large asset manager's disclosure for Q1 2012 only has the first page up (of 150+ that were supposed to be uploaded). Another manager reports that it voted both for and against the G4S attempted acquisition of ISS. Another manager has its voting decision on one key AGM missing. I've also seen a manager post up the same quarter's data twice  (ie its Q2 disclosure was actually its Q1 disclosure repeated) and it was for Q2 in the UK which is the most important bit!

It's fair to say that the industry has been fairly resistant to the idea of mandatory disclosure, and has put quite a bit of lobbying effort in the past to frustrating it. Some people may remember that when the Companies Bill was debated in the Lords the Tories and the Lib Dems combined to vote out the clause relating to the reserve power. I vaguely recall an IMA lobbying brief being read out pretty much verbatim by one Tory (can't remember if it was in the Lords or Commons). I suspect the politics of this issue have shifted somewhat now though.

Meanwhile the band of proponents of reform has gradually grown, and the principle of public disclosure (if not the need for mandatory disclosure) has basically been won. I think to be historically accurate The Co-op Asset Management set the ball rolling by starting to disclose in 2002. We started campaigning on it as an issue at the TUC around the same time. (Interestingly, the main reason we got stuck in at the TUC was because the industry was very unco-operative in response to the first fund manager voting survey. If they had played ball it might not have become a campaign.) More recently Fair Pensions has pushed the disclosure issue hard.

So, after ten years, we've got patchy voluntary disclosure. I hope we don't have to wait another ten years to finish the job properly.

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