PLSA Corporate Governance Policy and Voting Guidelines 2016/17
Members of the Pensions and Lifetime Savings Association have a clear interest in promoting the success of the companies in which they invest. As a consequence of this, we have long considered that one of our prime functions is to support members in engaging with investee companies. Our efforts are directed towards maximising the long-term returns of pension schemes’ assets, irrespective of the potential for short-term discomfort.
Our ‘Corporate Governance Policy and Voting Guidelines’ provide our members with examples of good stewardship practice and recommendations for key votes at the Annual General Meetings of their investee companies, on subjects such as executive pay, the re-election of directors and the approval of the annual report. The recommendations, which are agreed in consultation with the PLSA membership, are based on our members’ interest in ensuring that companies are run in a sustainable, accountable fashion that generates returns for investors over the long-term while also behaving in a responsible manner and supporting the interests of wider society.
Our wider work on corporate governance and stewardship informs our annual review of the guidelines. For example, our 2016 AGM report highlighted continuing controversy around excessive executive pay awards and also found much higher levels of dissent on shareholder votes over executive pay practices than for votes against the re-election of the Directors responsible for those practices. As such, our 2017 iteration of the guidelines suggests that our members take a much stronger line against the re-election of remuneration committee chairs at companies with problematic remuneration practices, recommending that shareholders voting against a remuneration policy should also vote against the re-election of the remuneration committee chair.
The 2017 guidelines also incorporate the recommendations of our stewardship toolkit on the reporting of corporate cultures and working practices and emphasises the importance of boardroom diversity, with particular reference to the targets on gender and ethnic diversity identified in the Davies and Parker reports respectively.
For more information on the guidelines, please contact Luke Hildyard, Policy Lead for Stewardship and Corporate Governance, via [email protected]