GLOBAL - Several major European pension funds are among the signatories of a petition to the US Securities and Exchange Commission (SEC) requesting more rights for shareholders in electing corporate directors.
Among others, the letter was signed by PGGM, the London Pensions Fund Authority, the Universities Superannuation Scheme, the Third Swedish National Pension Fund and the Californian teachers' scheme CalSTRS. Other signatories include asset managers like F&C, Standard Live Investments and the Australian Reward Investment Alliance.
"It cannot be emphasized enough how difficult it is for investors based outside the US to come to grips with the fact that shareholders of US companies lack basic rights which they take for granted in other developed markets," the letter states.
"Both in principle and in practice, the American board election procedure is both outdated and detrimental to the maximization of long-term shareholder value."
"US shareholder rights are much worse organised than in Europe," a spokeswoman for PGGM told IPE. "As PGGM is a global investor, also holding equities in the US it is important for us that shareholder rights improve over there."
The signatories are urging the SEC to support a recent court ruling which is challenging regulations on shareholders limited access to company proxies concerning board elections.
A decision on this issue was postponed by the SEC from October 12 to December 13. Critics say that SEC chairman Chris Cox did not want to discuss the issue during mid-term elections.
Furthermore, the postponement means that an SEC decision might come too late to be relevant for nominations for 2007 board elections in US companies.
In their letter, the investors demand more responsive and responsible board members stating that this might prevent a growth in the "dismaying number of corporate scandals and board-level derelictions of duty in recent years".