NETHERLANDS - Corporate governance forum Eumedion has welcomed a proposal by the Dutch parliament to make disclosure of voting records compulsory.
The legislation under discussion would force pension funds and insurers to disclose their voting record at company annual general meetings.
This would be a positive development, said Eumedion’s executive director Rients Abma (pictured), because many Dutch institutional investors did not yet have a transparent voting policy.
“Our latest poll of Eumedion members showed 30% are not transparent about their voting policy; that will increase in the near future because of this obligation,” he commented.
Transparency was important because pension funds and other institutional investors did not invest with their own money, but with the money of their beneficiaries, he added.
“They have the right to know what the pension funds are doing with their money,” said Abma. He also mentioned that it had become increasingly important for pension funds to study the corporate governance of companies they invested in.
Abma’s only reservation about the proposed legislation was that it could impose an administrative burden on smaller pension funds.
“Most of the smallest pension funds don’t even have a website on which to disclose it [the information],” he cautioned.
“If they have less than 100 beneficiaries and an investment capital of less than e5m, then they should not be obliged to have a such a voting policy.”
However, F&C Asset Management stated today that all pension funds, large or small, should have no problem complying with the legislation because most would be able to disclose the information through their fund managers.
Henk Breukink, managing director and country head, F&C Netherlands, said: A very large percentage of smaller pension funds, members of OPF, a Dutch company pension fund association, outsource the management of their investment portfolios to fund managers.”
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