UK - Corporate governance activists have launched a scathing attack on efforts by business leaders to ease tensions ahead of company annual general meetings.
Directors were told not to expect a let-up in shareholder pressure despite “peace talks” between the Investment Managers’ Association and the Confederation of British Industries.
Both sides vowed to work together more closely – and the National Association of Pension Funds offered its services as a mediator ahead of AGMs.
But investor lobby group Pension Investment Research Consultants attacked directors who seemed “unhappy with the idea they are managers, not owners, and need to be held accountable for their actions”.
A PIRC spokesman said: “For some chief executives, the idea that they cannot act as absolute monarchs seems to be difficult to accept. Their stewardship of other people’s money seems to conflict with their desires to stride the world like a great colossus.”
Hermes Pensions Management chief executive Tony Watson said directors were being asked increasingly difficult questions by shareholders, which was resulting in hostility.
And State Street Global Advisors UK chief investment officer Rick Lacaille dismissed claims that the recent spate of shareholder rebellions were media-driven. He said shareholders were picking up on fundamental company problems.
PIRC claimed tensions would only be eased when the government brought in the Companies Bill, which proposes a legislative statement of directors’ duties.
A PIRC spokesman said: “The 2001 report, which recommended the Bill, seems to be stuck on a shelf in Whitehall, with no action on the horizon. Economic power confers rights, but with it comes responsibilities and the Bill would lead to a welcome and comprehensive overhaul of company law.”
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