UK - Large UK pension funds' engagement with the companies in which they hold shares is growing further and getting results, says the National Association of Pension Funds (NAPF).

In a study published today, which surveyed pension funds with combines assets of £1bn, the NAPF has found pension funds are playing a more active role in corporate governance, while most schemes believe corporate control standards are improving.

"Six years ago, Paul Myners said institutional investors should engage with the companies in which they hold shares. Large pension [funds]  have risen to that challenge," commented NAPF chief executive Joanne Segars.

The report also argues managers are reporting regularly and comprehensively, and funds are aware of the Institutional Shareholders' Committee's (ISC) statement of principles on institutional investors' responsibilities, which states investors and their agents should monitor company performance and establish dialogue or intervene where necessary.

"Pension funds and their investment managers have not been shy about raising corporate governance concerns with company management and their constructive approach is getting results," commented Segars.

"While no one should be complacent pension funds believe governance standards in UK companies are continuing to improve," she added.

Her comments contrast with yesterday's survey by the Local Authority Pension Fund Forum (LAPFF), suggesting almost a quarter of large UK companies do not provide proper reports to their shareholders on audit practices.

The LAPFF revealed 23% of the FTSE350 companies do not disclose more than a summary of their audit committees' terms of reference, though the forum decline to name any of the organisations it researched.