EXTRACTS: The might of Shell, BP and Walt Disney have all been challenged by the world’s pension funds, proving no company is too large to face scrutiny. If big business genuinely feels accountable to shareholders, and those shareholders demonstrate a clear desire for sustainable, ethical behaviour, we could potentially enjoy a corporate world which is no longer solely governed by greed.
THE ARTICLE
By Gill Wadsworth
We have seen a flurry of shareholder action by pension funds in the past few months and it’s a trend that looks set to continue as institutional investors finally appreciate the value of engaging with investee companies.
While each stand taken might not result in the desired outcome, the importance of the messages sent to chief executives and chief investment officers across the globe cannot be underestimated.
The might of Shell, BP and Walt Disney have all been challenged by the world’s pension funds, proving no company is too large to face scrutiny.
And with the momentum growing, shareholder activism should earn its rightful place at the core of trustees’ thinking and, in turn, fund managers should feel the pressure to take a move proactive stance.
And this isn’t just about pension scheme returns; the importance of encouraging the world’s corporations to behave responsibly has a positive impact for us all.
Access to union representation, the right to work in a safe environment and refusing to reward directors for shambolic performance might seem like common sense, but the world’s major corporations are often severely lacking in such key areas.
Admittedly, so far we are seeing action from just the very largest schemes – the ones with enough resource to make a stand. However, smaller schemes, with the help of their fund managers, can also pile on the shareholder pressure, and investment houses need to ensure they are helping their smaller clients in this field.
If big business genuinely feels accountable to shareholders, and those shareholders demonstrate a clear desire for sustainable, ethical behaviour, we could potentially enjoy a corporate world which is no longer solely governed by greed.
Published: Apr 16, 2007
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