Corporate governance
As an investor, we want to see the businesses in which we invest adopting a culture of openness ad fairness, when companies embrace these values the benefits are passed on to their workforce and supply chains.
After all in our opinion, a transparent and well-managed business is more likely to be a successful one.
Our policy statement on corporate governance
We will challenge companies to:
- adopt and implement all appropriate codes of best practice, e.g. the Combined Code of Corporate Governance.
- avoid excessive pay to directors and rewards for failure.
- have strong safeguards against fraud, bribery and corruption.
Our policy in practice…
Executive remuneration
In 2006, share option schemes decreased in popularity 16 and were replaced by a range of alternatives. Co-operative Insurance voted against the adoption of schemes that sought to use the opportunity to increase awards, whilst lowering risk to directors. Furthermore, in contrast to other institutional investors, increased attention was focused on the actual size of total pay packages, when judged against market norms. Ex-gratia payments and bonuses paid on the success of a merger or acquisition were evident only in exceptional cases, as many companies seem to have been responsive to previous oppositional voting on such matters. In 113 cases, the remuneration resolution was voted against (2005: 138) and, in 110 cases, an ostentation was posted (2005: 166). In three instances, the re-election of members of the Remuneration Committee was opposed*.
*Northern Foods plc, iSoft Group plc and Town Centre Securities plc.
