The National Association of Pension Funds (NAPF) has updated its corporate governance policy and voting guidelines, which aim to assist its members in promoting the success of the organisations in which they invest, and ensuring the board and management of these organisations are held accountable to shareholders.
The guidelines have been revised to take into account the NAPF’s wider view of corporate governance, which looks beyond the corporate governance code.
Specific changes in the code are:
- A focus on individuals and succession: This year’s updated policy places much greater emphasis on the importance of individual responsibility, and in turn the role of shareholders in ultimately holding accountable those individuals that they have elected to the board.
- A wider view of risk: It has highlighted the need for reputational risks, such as an organisation’s approach to tax management, and emerging risks, such as those from cyber security and climate change, to be appropriately considered.
- Remuneration: This has long been an area of shareholder interest and public discussion. NAPF has updated its policy to set out more explicitly those issues it thinks investors should consider carefully when they vote on the remuneration policy, the remuneration report and the chair of the remuneration committee.
- Voting guidelines: The focus has moved from the corporate governance code generally to the specific resolutions being voted on at an annual general meeting. The NAPF hopes this will encourage shareholders to give more consideration to how they use their voting rights and subsequently to exercise their voting rights more coherently on all resolutions.
Will Pomroy (pictured), corporate governance policy lead at the NAPF, said: “Members of the NAPF have a clear interest in promoting the success of the companies in which they invest.
“So it’s a natural role for the NAPF, and one it has long considered part of its core purpose, to articulate the expectations of pension funds and the investment management firms who manage the pension funds’ assets.
“We focus our efforts on maximising the long-term returns of our member’s assets, irrespective of the potential for short-term discomfort.
“We strongly encourage shareholders to make systematic use of all of the powers at their disposal to support the highest standards of governance at the companies in which they invest, and consequently to support the success of these companies for the benefit of their individual scheme members.”