UK – The National Association of Pension Funds says that voting is an obligation of share owners and that it will recommend active voting as part of engagement with companies.

“The document makes it clear that the informed use of votes is an obligation (although not a legal duty) of owners,” the body said, referring to its new corporate governance code.

“In recognition of this, NAPF policy will recommend active voting, in support of management wherever possible, but will recommend a vote against where appropriate.”

“Engagement with companies is a necessary part of good ownership, and the NAPF and its associates will engage with companies at various levels on routine and more serious matters.”

The NAPF would also facilitate confidential committees for members who have concerns about particular issues or companies’ strategy.

“Equally, companies should take great care to ensure that their messages are clearly understood by shareholders and
that the concerns of the shareholders are clearly understood by the Board.

“The new policy document is a thorough update of NAPF policies in the light of the Higgs review and the new Combined Code, and brings together existing rules and guidelines into a single cohesive guide that sets out good practice both for company boards and shareholders.”

The guide aims to make clear the rights and responsibilities of shareholders and directors.

“The NAPF has long been dedicated to promoting a full awareness in the consequences and importance of the alignment of interests of shareholders and management,” said the NAPF’s strategic adviser on corporate governance, Geoff Lindey.

The NAPF has also published a guide for employers called the “Employers’ guide to pensions”. This sets out how workplace pensions can benefit both employers and employees, what options are available, and how costs and risks can be managed.