The Pensions Investment Research Consultants (PIRC) has published a revised edition of its UK Shareholder Voting Guidelines (Edition 15).
The key points to note are:
The Board of Directors
- PIRC regards the appointment of a chairman in an executive capacity as an obstacle to independence, particularly where there is no separate chief executive.
- Executives should encourage non-executive directors to challenge their proposals.
- Boards should have a senior independent director whose role is, amongst other things, to intervene in order to maintain board and company stability in times of Board "stress".
- From 2012, all listed companies should propose all directors for re-election on an annual basis.
- Pay restraints should actually bite, not simply take with one hand but give back with the other or at another time.
- Companies should provide information on the thinking behind their remuneration policies.
Audit and reporting
- Accounting treatment should not be driven by it being beneficial to management remuneration.
- There should be greater audit committee transparency, to be achieved through more detailed reporting by the committee.
Shareholders' rights and corporate actions
- PIRC expects companies to disclose the subject area of meetings which have taken place over the previous year between directors and shareowners or shareowner advisory bodies.
Copies of the new UK Shareholder Voting Guidelines can be ordered from: www.pirc.co.uk