UK - Schemes and fund managers are backing an industry drive to counter scepticism over active shareholding.
The UK Social Investment Forum says it has received an “extremely positive” response to proposed guidelines designed to measure levels of activism among fund managers.
The guidelines aim to help trustees and consultants judge which managers offer the best service. Consultation on the proposed guidelines ended on Tuesday.
Currently it is difficult to assess levels of activism, with a government report in July finding that only 10% of schemes used activism as a criteria in their choice of manager.
The UKSIF initiative will require disclosure of how many fund management staff work on engagement, how they report to trustees, and how voting policies and objectives are set.
The £19.3bn Universities Superannuation Scheme said making responsible investment information available to pension funds was long overdue.
Responsible investment adviser David Russell said: “In the past it was very difficult to gauge what fund managers were actually doing with respect to the implementation of pension fund RI policies, so standardised disclosure of activities will be very useful.”
London Borough of Tower Hamlets local government trade union pension fund observer John Gray also backed the guidelines. He said: “This information is what an active trustee, who is concerned with governance issues, needs in order to find out how committed a fund manager is with regard to shareholder activism.”
UKSIF expects trustees to increasingly have to report to members about activism policies and how they are being implemented. By ensuring fund managers report this, it believes this will become easier.
Twelve fund managers - including Insight Investment - have already agreed to pilot the guidelines from October.
Insight investor responsibility director Rory Sullivan (pictured) said: “As seen with environmental performance, transparency is frequently a key driver for improvement - it rewards the leaders for doing more, while simultaneously creating an accountability mechanism for the laggards. The UKSIF transparency guidelines should have the same effect on fund managers.”
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