US pension funds check governance in Europe

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The Independent Online
PENSION funds in the US plan to take a more active role in policing the corporate governance standards of European companies in which they buy stakes.

Maryellen Andersen, director of investor relations at the dollars 12bn Connecticut state pension fund, outlined plans by US institutions for an information network between investors on either side of the Atlantic.

She also told a National Association of Pension Funds conference in London that her own fund was already taking an interest in corporate governance issues at British companies in which it invested.

Connecticut's advisers in Europe, including Schroders, 'are going to have to look at the companies and the corporate governance issues in those companies before they buy the stocks for us', she said.

In the US, public sector pension funds have set up a network for discussing investor issues such as directors' performance and remuneration.

Earlier this month, pension funds in the US, Canada, Australia, Britain, Germany and France held a telephone conference to plan what she called an 'international corporate governance organisation'. The powerful Council of Institutional Investors in the US has agreed to play a pivotal role, and the NAPF is involved in Britain.

Ms Andersen said: 'We want to get this off the ground to communicate among ourselves on the various corporate governance issues in these countries.'

The idea is that international investors will be able to check, before taking action, whether a company they are worried about is out of line with local practice.

Ms Andersen said several US funds had banded together two years ago to criticise a French company over unequal voting rights on shares.

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