FRANCE - The e19.2bn Fonds de Reserve pour les Retraites (FRR) has said that it will actively participate in improving corporate governance of the issuers that it invests in by ensuring that its shareholder rights are "systematically exercised" in issuer shareholder meetings.
Issuing guidelines for voting proxies at shareholder meetings, the fund said that while it does does not intend to use its shareholder influence to acquire formal representation on the corporate governance bodies of the issuers it invests in, it would promote (i) a clear and balanced separation of powers in corporate governance bodies, (ii) reliable information for shareholders, and (iii) respect for shareholder rights and the integrity of shareholder votes.
“As a reserve fund that is closed until 2020, the FRR is by nature a long-term investor. In structuring its portfolio and awarding asset management mandates that correspond to the investment strategy decided on by the supervisory board in April of 2003, the FRR has opted for an active approach, based on the analysis of the valuation prospects of the debt and equity securities issued by the various types of issuers.
“Therefore, it is reasonable to expect that this long-term perspective be taken into account by the asset managers in the case by case application of the guidelines,” the fund said in a statement.
The fund said that active approach to voting proxies that the supervisory board has chosen must also be pragmatic, taking into account local market conditions or business-specific factors related to the issuer's relative size, as well as major differences that may be found between corporate law and corporate governance practices from one country to the next, even within the European Union.
The guidelines were ratified by the executive board of the FRR supervisory board at a meeting held on 26 Janauary, 2005.
The FRR has also revealed that it will commit “significant” amounts to its SRI and private equity programmes, according to an FRR spokeswoman.
“It could be at least e100m for each,” the spokeswoman said.
The fund is currently in the process of hiring a private equity consultant, the spokeswoman added. The information was revealed by Francis Mayer (pictured), chairman of the executive board and Raoul Briet, chairman of the supervisory board, at a press conference late last week.
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