UK/GERMANY - Germany's ban preventing company managers from becoming board members until a two-year waiting period has passed could be detrimental to the country's companies, Hermes warned.
In a letter sent to the chairmen of German companies listed on DAX and MDAX, the asset manager - owned by the British Telecom pension scheme - said the mandatory waiting period would lead to "valuable experience and relevant knowledge" being lost.
It read: "The financial crisis has shown that company specific knowledge and sector experience are of high importance for the overall efficiency of supervisory boards."
Under new regulations introduced this month as part of a law on remuneration, a German company's management board members cannot join the supervisory board for two years unless a quarter of investors vote to approve such move.
"In appropriate cases, we are therefore willing to use the legal opt-out of the mandatory waiting period by supporting shareholder proposals for the election of personally suitable and successful management board members for the supervisory board," the letter added.
Hermes also said it welcomed the new rules on management remuneration aimed at setting "more appropriate incentives" for managers and which will allow investors to have an advisory vote on managers' remuneration. However, it showed caution on the implementation of such rules.
It said: "We fear that difficulties in defining and interpreting some of the concepts relevant for setting remuneration will create legal uncertainty and that therefore especially the legal and remuneration advisors will benefit from the new rules."
Mark Evans has been appointed as a director at Independent Trustee Services (ITS) to lead trustee appointments in London.
The Pension Protection Fund (PPF) is consulting on changes to the actuarial assumptions it uses in valuations in a bid to better reflect the bulk annuity market, with schemes set to move into surplus on aggregate.
Private sector defined benefit (DB) schemes were 96.3% funded on a Pension Protection Fund (PPF) compensation basis at the end of July, according to the lifeboat fund's monthly index.
Conduent has completed the sale of its actuarial and human resource consulting business to private equity investor, H.I.G. Capital.