The 2007 Shareholder Engagement Survey, published by the National Association of Pension Funds (NAPF), shows that Britain’s largest pension funds (39 Funds with over £1bn in assets) are actively engaging with the companies in which they invest.
Some of the key findings were:
Pension funds are playing an active role in corporate governance: More than three quarters of funds surveyed have helped change remuneration packages, board membership or corporate strategy by engaging with companies in which they invest. .
Corporate governance standards are improving: Eight out of 10 funds believe corporate governance standards are continuing to improve. None believed standards had deteriorated.
The ISC Statement of Principles is being implemented: Every fund surveyed was aware of the Institutional Shareholders’ Committee’s Statement of Principles on institutional investors’ responsibilities. The Statement says that investors and their agents should monitor company performance, and should be prepared to establish dialogue and intervene where necessary. Two thirds had incorporated the Principles into managers’ contracts, with the very largest funds most likely to have done so.
Managers are reporting regularly: Pension funds are demanding regular and comprehensive reports from agents who vote or engage with companies on their behalf. On average, investment managers report to pension funds at least twice a year.