The UK’s pension fund association has told pension schemes to be prepared to hold company directors to account over decision-making during the coronavirus pandemic that could backfire in the long-term.

The Pensions & Lifetime Savings Association (PLSA) said it was pleased to acknowledge companies had generally acted responsibly in the face of the extraordinary challenges posed by the pandemic, but that its guidance to schemes followed news that some UK firms were laying off or furloughing members of staff during the crisis while maintaining full pay and bonuses for high-paid directors and chief executives.

It said that in the upcoming season of annual general meetings (AGMs), investors should consider voting against directors who they believed did not behave appropriately towards their workforces.

Caroline Escott, policy lead for investment and stewardship at the PLSA, said: “This AGM season it is worth investors remembering that the post-crisis memories of the public and policymakers tend to be long.

“How companies behave now towards their workforces will likely have a material impact on their future revenue, operating costs and even the post-Covid-19 regulatory environment.

“This in turn has consequences for scheme investors’ risk-adjusted returns and ultimately for the value of beneficiaries’ savings.