FairPensions releases response to Myners Principles consultation
FairPensions was invited to participate in the consultation on the government's proposals for updating the Myners principles which outline best practice for institutional investors on issues like the governance of companies. We have now brought out our response document, focussing on those aspects most relevant to responsible investment, which you can read here.
While we welcome the decision to re-examine the principles given the changes that have occurred to the pensions industry since their inception, there are aspects of the Government's proposals that concern us.
The decision to simplify the Principles seems to have been based on the assumption that pension funds are largely adopting the best practice approach described in the Principles and there is no need to preserve the external guidelines that they represent. This assumption is at odds with the findings of FairPensions own research - our annual surveys of the largest UK pension funds and their fund managers shows that although there are some notable exceptions, many are falling short of best practice. [link to the latest surveys]
We question why the government did not apparently consider the option of keeping the principles at their current level of detail whilst updating them to reflect recent changes affecting institutional investors, especially as the principles are a non-binding set of guidelines.
FairPensions also believes that the Investment Governance Group (IGG), the body which will take ownership of the updated principles, should contain representatives of pension fund beneficiaries. These could be member-nominated trustees or representatives of civil society groups, such as trades unions, who could speak for the beneficiaries of pension schemes.
The proposed changes would weaken the existing principles, and could ultimately lead to the failure of self-regulation, which would strengthen the case for statutory regulation.
Read FairPensions response to the Myners Principles consultation