Ross Goobey attacks pension fund trustees who fail to vote

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The Independent Online
Alastair Ross Goobey of Hermes, one of the City's top pension fund managers, yesterday attacked pension fund trustees who fail to vote at annual meetings.

He suggested they should be forced to lodge proxies declaring their intention to abstain, whenever they decide not to vote.

He also revealed that he had been approached by someone who had offered to pay Hermes to cast its vote in their interest at an agm, though he had refused the request.

Mr Ross Goobey said: "Whether or not this is legal or ethical, we did not agree, but it does demonstrate the value of a vote."

Mr Ross Goobey did not go as far as insisting on mandatory voting at annual meetings, a policy fiercely opposed by the National Association of Pension Funds which was hosting the London conference where he spoke.

But he said: "I am more hawkish than my colleagues and believe that we should press for compulsory lodging of proxies." He believed that trustees were not acting in a proper fiduciary fashion if they failed to use their proxies.

If trustees were obliged to lodge them at company meetings "it would force them as fiduciaries to develop a coherent voting policy".

The NAPF argued in its opposition to mandatory voting that a compulsory vote was a thoughtless vote, and that it would also be anti-democratic not to allow for abstentions.

Mr Ross Goobey said: "I am not in favour of making voting compulsory. I agree that an abstention is a valid option, but this should be done deliberately, and a proxy card with abstain written on it would fulfil my ambitions."

He added that last month PDFM noted, in its 1996 survey of investment arrangements for pension funds, that ''there was a sharp increase - from 17 to 28 per cent of respondents - who claim to 'always vote' at UK company meetings''.