UK - Almost half of UK institutional investors are now disclosing their voting positions in general meetings but Ed Balls, economic secretary to the Treasury, wants this figure to rise, and urged the industry to come up with a 'comply and explain' code.

"Our clear preference is for the industry to work to a voluntary approach. Regulation is neither the government's or industry's first best choice. But, any voluntary approach needs to be effective," he told delegates at the NAPF investment conference in Edinburgh yesterday evening.

After a meeting with the Institutional Shareholder Committee last week Balls said he is now convinced that "they will have an industry ‘comply or explain' code up and running by the summer".

According to Balls, investors who do not disclose how they vote their shares should be required to provide "principled reasons" for not doing so.

A spokesman for PIRC, a leading UK corporate governance specialist, added that not all disclosure is the same. Some amounts to no more than box-ticking and PIRC wants the ‘comply or explain' code to require standardised reporting.

The NAPF meanwhile calls on institutions to participate in its third engagement survey which starts next week. "With that we can persuade the Treasury that the voluntary approach is still working," Joanne Segars, chief executive of the NAPF said.

Similarly, Mark Anson, chief executive of Hermes and formerly with US pension fund CalPERs, demonstrated to the delegates how active shareholder engagement can add value to an equity portfolio.

He also painted a rather bleak picture of governance in US companies and urged European institutions to step up shareholder engagement.

"The Securities and Exchange Commission (SEC) in the US is only just waking up to the fact that there is a large group of shareholders in US companies that it had not heard from previously and that it will have to deal with."

One example was a representative of Norges Bank, whose investment arm oversees assets of the Norwegian Government Pension Fund - Global, which has visited the SEC to talk about shareholder engagement.