Unions attack Tories' stance on voting secrecy

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The Independent Online

The Trades Union Congress will today launch a furious attack on Conservative MPs' attempts to water down new laws that would force institutional investors to declare how they vote at company meetings.

Under the Government's Company Law Reform Bill, large investors such as pension funds and insurance companies would have to publish details of how they vote at company AGMs.

The TUC is one of several organisations to have campaigned for such a change in the law, on the grounds that it would promote socially responsible investment and better standards of corporate governance.

However, a spokesman for the Conservative Party said: "We are suspicious about this part of the Bill because it represents an unnecessary burden on fund managers for which we cannot see any real justification."

Brendan Barber, general secretary of the TUC, said: "To oppose this progressive measure is to go against the current grain of increasing the power of shareholders to hold investors and companies to account and raise boardroom standards.

"The Tories are taking the side of old-fashioned secrecy in the City over modern socially responsible business."

As part of a campaign to support the Government's proposals, the TUC is today launching its 2006 Fund Manager Survey, its annual attempt to persuade institutional investors to disclose details of their voting records.

This year's survey will ask fund managers to reveal how they voted on key corporate governance issues such as the reappointment of Sir Ken Morrison as chairman of the Morrison supermarkets company, and the controversial remuneration arrangements at United Business Media.

The TUC has recorded a 65 per cent increase in the number of responses to its fund manager surveys over the past four years, suggesting greater openness. But it warned that 9 in 10 large investors that still refuse to give details of their voting records said they had no intention of doing so in the future.

"Our survey has begun to lift the veil of secrecy covering how fund managers govern billions of pounds of investments on behalf of pensions savers," Mr Barber added. "But others have made it clear they will only do so if there is a level playing field on which everybody has to be transparent - the Government should stick to its ambition of ending secrecy in the City."

A spokesman for the National Association of Pension Funds said it was also opposed to the change in the law. "It should be an issue for individual investors themselves," he said. "It doesn't necessarily have to be a matter of public record."