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F&C sides against limiting voting rights in France

FRANCE - Investment manager F&C has vowed to turn up pressure on French companies to end the practice of limiting voting rights.

The decision comes after a 94% vote at media giant Vivendi ‘s annual general meeting (AGM) to eliminate voting rights limitations. F&C backed the resolution calling for an end to voting rights limitations.

The firm said it has become the largest UK-based investor to throw its weight behind French corporate governance activist Proxinvest Active Investors in backing resolutions at annual general meetings, AGM.

Karina Litvack, head of governance & socially responsible investment at F&C, said that in France it is not uncommon for companies to restrict shareholders from voting more than 2% of the issued share capital.

"But we strongly believe that the principle of 'one share -one vote' is a cornerstone of good governance," she said.

Commenting on Vivendi’s AGM, Litvack said "The company deserves to be commended for having the integrity to let shareholders decide.”

She added at Alcatel, Danone, Schneider and Total resolutions did not make it on to the ballot and the matter was not discussed at their AGMs.

"This may not quite be a case of opening 'Pandora's Box' but it is milestone in improved French corporate governance," said Litvack.

She added however that F&C believed Vivendi's move “significantly” increases the pressure on other major French companies to discuss the issue and will be backing similar resolutions at the forthcoming AGMs of Société Générale and Lafarge.

Separately, Standard Life Investments has launched an on-line voting disclosure system to increase voting transparency, raise industry standards on corporate governance and support government recommendations.

Disclosures, which are made monthly in arrears, reveal whether the leading investment house has voted against or abstained on a particular resolution and include a brief explanation where the company did not support management recommendations.

Keith Skeoch, chief executive at Standard Life Investments, commented: “It is a natural progression for our Corporate Governance team which has been active for over 10 years”

“It does not reflect any changes in our voting policies or our approach to corporate governance issues but it does reinforce Standard Life Group’s commitment to openness and accountability” he said.

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