SWITZERLAND - Corporate disclosure has gone too far in the UK, says Colin Melvin, director of corporate governance at Hermes Pensions Management.

Speaking at the IFM conference in Geneva, where he was part of a panel focusing on corporate governance, Melvin said: “Disclosure is a good thing but it can go too far and I suggest it has gone too far in the UK.”

He told delegates that there have been complaints about the costs associated with corporate disclosure. Melvin said the main problem was the set of different disclosure guidelines and codes that firms implement.

Hermes – owned by the BT Pension Scheme - is trying to tackle this problem in conforming to the UK’s Combined Code. In January Hermes, which sees itself as a pioneer in corporate governance and shareholder engagement, said it was replacing its own corporate governance guidelines with the code.

Melvin’s observation was seconded by fellow panellist Anita Skipper, head of corporate governance at Morley Fund Management. She said Morley has done the same thing.

Skipper pointed out it should be a matter of better rather than more disclosure. She argued that disclosure could have “perverted effect” – such as where greater pay disclosure leads to higher pay demands.

“On balance it is better to have more than too little information,” she said.

Roger Urwin, global head of investment consulting at Watson Wyatt, added: “We are still probably at a point where we haven’t quite got to an optimal point. Costs are acceptable but at the same moment they could tip over.”

Urwin also said that corporate behaviour is likely to become more of an issue among institutional investors as the pension industry moves from defined benefit to defined contribution.

He said he emphasis would shift from focusing on returns in themselves to considering sustainability and corporate behaviour more as investment issues.

Asked how significant corporate governance was to trustees looking for a manager, Urwin answered: “The number one issue is selecting a good manager.”

But he added that pension funds could have “a significant role” in changing things.