Co-operative Financial Services (CFS) has called on the Government to require institutional investors to reveal how they vote at company meetings.
In a formal response to the Government's Company Law Reform Bill, CFS supports the idea, contained in the proposed legislation, that companies should publish the result of any polls called at company meetings it holds shares in, while noting that the effectiveness of this would be limited without a requirement for polls to be called as a matter of routine.
In addition, CFS is calling for a similar level of disclosure from institutional investors, who cast the great majority of votes.
Co-operative Insurance Society (CIS), which together with the Co-operative Bank makes up CFS, has been disclosing its UK voting record since 2002.
Since CIS began disclosing how it votes at company meetings three years ago, only Standard Life and F&C have committed to following suit, while the rest of the industry appears to be resisting voluntary disclosure.
That is why CFS now wants the Government to reconsider legislating for mandatory disclosure of voting by UK institutional investors.
CFS Chief Executive David Anderson said: "Everyone with a pension or a life assurance policy is entitled to know how institutions vote in their name. Such a lack of transparency enables those managers who do not take voting seriously to evade their duties to customers and to the wider community.
"To date, the Government has been persuaded that a voluntary approach to disclosure will work. Given the inadequate response from the majority of institutional investors, it is surely time to reconsider this approach."
The call for mandatory disclosure has been welcomed by the TUC, which has been a vocal campaigner for greater transparency within the fund management industry for some time.
TUC General Secretary Brendan Barber said: "TUC research shows that the nine out of ten fund managers who don't currently publish their voting records have no plans to do so.
"There are still some institutional investors who do not vote regularly, or who always support management.
"We've achieved real change though our campaigns, but voluntary disclosure will always allow some to keep the votes they cast on behalf of millions of pension fund members and savers secret. The only way to guarantee disclosure is through a change in the law, just as it was the only way to make directors reveal their pay packets."
In June 2005, CIS became the first insurance company in the world to launch a customer-led Ethical Engagement Policy.
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