UK - The National Association of Pension Funds (NAPF) has criticised a government proposal which could require institutional investors to disclose how they have voted with their shares.
In its proposal on company law reform, contained within a consultation document posted on the Department of Trade and Industry’s (DTI) website, the government argued that while disclosure could yet be restricted to clients and members, ‘there is also a public interest in disclosure of voting to help improve the governance of listed companies.”
An NAPF spokesman said today: “We think it’s perfectly reasonable that investment managers should disclose to their clients how they voted, but we can’t see any public interest served by letting the wider public know, because it’s a commercial arrangement between the client and their investment manager.
“We will be writing to the DTI in the next couple of weeks to make those points,” he added.
The proposal argued that clients or members had limited powers to monitor institutional investors and to hold them accountable for their stewardship.
Greater voting transparency, it said, could also enhance the efficiency of institutional investment by reducing the risk of conflicts of interest.
The government predicted the cost of increased disclosurewould be modest because the information should already be recorded.
The consultation document was posted on 14 October 2005 and comments must be made by 24 October.
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