Pfizer praised for governance engagement
US - Pharmaceutical giant Pfizer has been commended for its decision to regularly meet with institutional investors and discuss its corporate governance.
In a statement issued by the drugs manufacturer, Pfizer claims to have been at "the forefront of corporate governance over the last two decades" and its latest move sees them become the first US company to initiate regular meetings with institutional investors on governance matters.
Representatives of Pfizer's largest shareholders - who collectively hold 35% of its equity - are now being invited to a meeting to "provide comments and perspective on the company's governances policies and practices including executive compensation".
"We believe this meeting with shareholders on our governance and compensation policies will give us valuable insights and help us maintain the highest standards in corporate governance," said Constance Horner, led director of the Pfizer Board.
Jeff Kindler, CEO and chairman, also added: "Open and candid dialogue with our shareholders - and, in fact, all of our shareholders - is very valuable and will help us become a better company.
However, Mark Anson, chief executive of Hermes Pensions Management, the investment house behind the £38.3bn (€55.9bn) BT pension fund, has been highly critical of US listed companies and their history on corporate governance in recent months, including Pfizer under its former CEO Hank McKinnel.
Writing in IPE's May edition, Anson argued "you do not have to go that far back to see how bad corporate governance in the US has become", and cited Pfizer as one company which had serious issues to address in its corporate governance and subject to its engagement programme.
Pension funds and institutional investors' attempts to improve Pfizer's practices may, in part, have paid off as Anson now believes simple act of engagement is already proof of better corporate governance.
"I commend [Pfizer's] decision as it is a very positive development and demonstrates they are serious about having a dialogue with their investors, and listening," said Anson.
"It is something chief executives of publicly-listed companies in the US have failed to do. I suspect it will have an impact because any time you establish a dialogue it is a form of governance in that you fulfil the direction [investors] wish to have.
"Dialogue is just a component of good corporate governance. But it is nice to see them put up instead of shutting up, " continued Anson.