NAPF publishes guidance on remuneration policies

The National Association of Pension Funds (NAPF) has published its latest Corporate governance policy and voting guidelines.

The guidance includes:

• New remuneration principles against which investors can judge an organisation’s pay policy and its appropriateness for that organisation.
• More robust expectations for corporate accountability.
• Greater emphasis on corporate reporting of extra-financial factors, including risks to reputation such as their approach to tax management.
• Encouragement for investors to use their full range of powers.

The policy and guidelines are updated annually to reflect the latest market best practice, investor expectations and regulatory changes.

Joanne Segars (pictured), chief executive at the NAPF, said: “The NAPF’s priority is to maximise the long-term returns of our members’ assets, irrespective of the potential for short-term discomfort.

“Our guidelines aim to support our members in promoting the success of the organisations in which they invest, and ensuring that the board and management of those organisations are held properly accountable to their shareholders. 

“This year, we are more strongly encouraging employers to identify and engage with their long-term investors, rather than those on their register who are more interested in short-term trading.

“We expect remuneration committees to set rewards which drive long-term strategic success and seek to reward performance over the longer-term; in most cases this will be longer than three years.”