Pensions Investment Research Consultants switches its focus

Financial Times article:

Shareholder group switches its focus
By Sundeep Tucker
Published: February 10 2005 02:00 Last updated: February 10 2005 02:00

An activist shareholder group is to switch some of its focus from director pay and auditor independence and instead press companies on issues such as boardroom appraisals and succession planning. The move by Pensions Investment Research Consultants, a London-based governance voting service, is a sign that corporate governance activism is moving beyond the controversies of the past five years such as large pay-offs for failed directors.

Most investor groups believe that the 2003 revised Combined Code on Corporate Governance - which incorporated many of the boardroom recommenda-tions made by Sir Derek Higgs - has put a stop to the worst examples of boardroom excess.

As a result, shareholder pressure groups, such as the Association of British Insurers and the National Association of Pension Funds, are increasingly using their collective clout to press companies to adopt practices which they feel will develop the company and thus 'add value' over the long term. The Pirc move was unveiled as part of its 2005 shareholder voting guidelines.

Pirc advises local authority pension funds and fund management groups how to vote at company annual meetings. Its clients boast combined assets under management of $560bn.