TUC accuses City of disclosure failure

Fund managers are today being told to come clean on how they vote as shareholders by the Trades Union Congress, which said the City should be more accountable to the millions of workers that invest through pension funds.

In a survey published today, the TUC names 22 fund managers that failed to disclose their voting records at 49 annual general meetings between 2001 and 2002. These fund managers include Barclays Global Investors (BGI), HSBC, Invesco, Scottish Widows Investment Partnership (SWIP) and Threadneedle. Of the 53 fund managers surveyed, only 40 per cent were forthcoming about their voting decisions. Around 50 per cent would not even disclose the principles upon which they made their voting decisions.

Brendan Barber, the general secretary of the TUC, said: "Pension fund money is invested on behalf of millions of people at work.... Workers are owners of these funds and should know how their ownership rights are exercised. Trustees should not be denied important information about the behaviour of fund managers when weighing up whom to trust with their retirement assets."

More than 90 per cent of pension trustees give their fund manager full discretion on how to vote on their shareholdings. Fund managers are under no obligation to publish details of how they voted on controversial company issues, which usually revolve around pay packets and share option schemes.

The TUC is calling for greater transparency by the fund management community.

Some voting records, such as those from Britannic, Cazenove, and Standard Life Investments, were achieved at the request of pension fund trustees, who then passed on the information to the TUC. Merrill Lynch, Newton, Fidelity and Axa were among those fund managers that would only provide information on voting principles.

Isis, the Co-operative Insurance Society, M&G and Morley were among those providing full information on both their records and principles.

The Investment Managers' Association, which represents the views of the fund management industry, told members not to be pressurised by the TUC to respond to its survey, saying its tactics did not lend to a constructive debate.

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