GLOBAL - The California Public Employees' Retirement System's (CalPERs) success in pushing through majority voting at Apple will encourage European pension funds to beef up their approach to US equities, governance specialists from APG and Sweden's AP3 have argued.

A recent Apple shareholder meeting delivered only a partial victory for the US$230bn (€170bn) Californian scheme, which had targeted the tech giant and 57 other US firms with a campaign in favour of majority voting in director elections.  Shareholders at the same meeting rejected demands for a clear succession plan.

Claudia Kruse, head of corporate governance at €266bn asset manager APG, which supported the CalPERS campaign, said majority voting was one of several proposals target designed to bring US governance in line with best practice. "Majority voting is just getting the most attention," she said.

The US is the only developed economy not to have enforced majority voting for directors. In Apple's case, a plurality voting system had meant that shareholders could oppose candidates only by withholding their votes - a rule described by Anne Simpson, who heads the CalPERS corporate governance programme, as "more coronation than election".

Frank Curtiss, head of corporate governance at £17bn (€19.9bn) RAILPEN Investments, agreed with the assessment. "It's a Soviet system," he said.  "It's amazing that the US is such a massive democracy but that, for corporate America, majority voting is a step too far."

Curtiss described US corporate governance as a battle slowly being won, citing the recently passed Dodd—Frank Act, which mandates triannual votes on pay but notably omits director elections.

"Some companies are afraid that majority voting will release chaos but they're worrying unnecessarily," he said.

Peter Lundkvist, head of corporate governance at Sweden's SEK209bn (€22bn) buffer scheme AP3, said the decision could only be good for governance.

"The evidence that we're becoming more activist on governance is pretty clear. Look at the UK Stewardship Code - and I expect to see something similar across Europe. Activism will come to Europe - and Sweden."

He added: "Good governance is important if going to have long-term higher returns keep track of risk.  Governance is one of the most important questions if you're an investor in equities, listed or unlisted."

Tom Powdrill, head of communications at PIRC, a governance consultancy, said:  "The US market is way behind on shareholder rights. But this will definitely increase the momentum and demonstrate that you can achieve change in well-developed markets. It has to be a good thing."

However, despite the victory for governance, pension schemes have not been deterred from investing in US equities, which Kruse said was a result of the ubiquitous influence of the market.

"For a fund of our size, it's impossible to ignore the US. It's too important a market."