UK – Reflecting the higher profile corporate governance is now taking for the pension industry, a survey of UK pension trustees reveals that a majority see good corporate governance as the most important factor in the performance of UK stocks in the long term.
Corporate governance is a live issue right now, in the wake of the Higgs report on non-executive directors and the Winter Report at the European Commission level.
According to the new survey by the Just Pensions organisation, 52% of respondents believe that good corporate governance will have a substantial positive impact on the market value of the main UK stock index, the FTSE 100, over the next five to 10 years. Thirty-eight percent see it as significant in the short term, in the next year.
“The results of this survey show that member nominated trustees are already largely convinced that there is a clear financial case for good governance,” said Brendan Barber, the incoming general secretary of the umbrella body for UK unions, the Trades Union Congress.
Barber said trustees see other factors such as employment practices and stakeholder relations also hitting corporate bottom lines.
“Interestingly, trustees from the larger funds (five billion pounds plus) and those with investment training were more likely to believe the six areas of business performance would have substantial impact,” said Chris Gribben, associate director of the Ashridge Centre for Business and Society.
“This clearly underlines the importance of social and environmental issues and their potential to influence shareholder activism,” Gribben adds.
Just Pensions surveyed more than 100 member nominated trustees of pension funds. Just Pensions is part of the UK Social Investment Forum in association with Ashridge and the TUC.