Updated Corporate Governance Policy and Voting Guidelines Published | PLSA

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Updated Corporate Governance Policy and Voting Guidelines Published

12 December 2015

The Pensions and Lifetime Savings Association (the Association) has published an updated edition of its Corporate Governance Policy and Voting Guidelines. The two primary aims of the Corporate Governance Policy and Voting Guidelines are to: promote the long-term success of the companies in which the Association’s members invest; and, ensure that the board and management of these companies are held accountable to shareholders, such as pension funds.

Luke Hildyard, Policy Lead: Stewardship and Corporate Governance, Pensions and Lifetime Savings Association, said:

“Pension funds, our members, are long-term investors and have a clear interest in promoting the long-term interests of the companies in which they invest.  It is an essential part of our role to represent these interests to maximise the long-term returns of our members’ assets, irrespective of the potential for short-term discomfort.  We develop the policy and guidelines through consultation with our members and the changes to this year’s edition reflect both our recent work and our intention to advance market best practice.”

Some of the specific changes in this year’s policy and guidelines are outlined below.

Reporting on strategic risk

Earlier this year the Pensions and Lifetime Savings Association examined how corporate reporting should enable an investor to understand how a company is maximising the long-term value of the human capital at its disposal – and equally importantly set out the board’s view of the associated strategic and operating risks. The composition of the workforce and the sustainability of the employment model warrant further transparency in corporate reporting to allow shareholders to gain a comprehensive view of the risks and opportunities present within the company. 

Similarly, this reporting should evolve to reflect emerging risks such as cyber-security and climate change and the reporting should show how these risks are managed and what changes have occurred in relation to these risks in the past year.  Where a risk materialised in the past year the report should communicate clearly how the company is responding.

Ensuring directors have sufficient time to fulfil their role properly

The non-executive role is an increasingly demanding one, particularly when chairing a key committee, and is essential to the effective governance of the company.  It is crucial that directors have sufficient time and energy to fulfil their role properly.

This year’s policy and guidelines include a note that shareholders should be mindful of concurrent directorships and their respective call upon an individuals’ time.  For complex companies it may be appropriate to vote against the (re)-election of a non-executive director who holds more than four directorships.  Where a director chairs a number of key committees a stricter view may be adopted, especially where an individual is a director of two or more companies in heavily regulated industries.

The issuance of new shares under the Pre-Emption Principles

Companies are allowed to issue shares for cash without the application of pre-emption rights, under Section 570 Authorities.  Under this Authority, there are limits and rules to the percentage of issued share capital that can be issued as new shares for cash.  Similarly there are rules which govern the percentage of shares that can be issued over three years (for purposes other than in connection with an acquisition of specified capital investment) without the application of pre-emption rights. 

A new addition to our policy and guidelines this year is that companies should clearly signal at the earliest opportunity their intention to undertake a non-pre-emptive issue and to engage in a meaningful dialogue with their shareholders about this.  Companies should keep shareholders informed of issues related to an application to dis-apply their pre-emption rights.  In return, shareholders should review each case made by a company on its own merits and decide on each case individually, using their investment criteria.




We’re the Pensions and Lifetime Savings Association, the national association with a ninety-year history of helping pension professionals run better pension schemes. With the support of over 1,300 pension schemes and over 400 supporting businesses, we are the voice for pensions and lifetime savings in Westminster, Whitehall and Brussels.

Our purpose is simple: to help everyone to achieve a better income in retirement. We work to get more money into retirement savings, to get more value out of those savings and to build the confidence and understanding of savers.


Lucy Grubb, Head of Media and PR, Pensions and Lifetime Savings Association
T: 020 7601 1726, M: 07713 073023, E: [email protected]

Eleanor Carric, Press Officer, Pensions and Lifetime Savings Association
T: 020 7601 1718, M: 07825 171 446, E: [email protected]

Kathryn Mortimer, Press Officer, Pensions and Lifetime Savings Association
T: 020 7601 1748, M: 07901 007713, E: [email protected]