Transparency corporate voting

British Government is proposing legislation to reform company law to give government the power to require institutional investors including pension scheme trustees to disclose how they voted on corporate actions. The idea is that retail investors should be entitled to know how assets owned on their behalf are voted. It is believed that making boards widely known would reduce the potential for conflict of interest and increase the accountability of institutional investors.

The proposed amendment would give the government the power to specify which classes of institutional investors – including investment trusts, unit trust, life assures and pension schemes- must disclose how they voted on issues put forward by companies in which they owned shares.

The government prefers to develop a voluntary disclosure system. Any mandatory approach would be preceded by extensive consultation.