14 November 2016
Investment groups are facing a corporate governance crackdown as pressure mounts on the way asset managers vote on pay and monitor issues such as board independence and company strategy.
Regulators will remove asset managers and pension funds from the
Groups such as Franklin Templeton Investments, Toscafund Asset Management, Neuberger Berman Europe and
"This is a significant move in an effort to encourage asset managers and owners to raise standards and report in a better way," said
"It will give clients a better idea of what asset management groups and owners are doing on stewardship, how they are disclosing the way they vote, whether they use proxy advisers and how they are dealing with any potential conflicts of interest."
The FRC has created three tiers for its nearly 300 signatories to the code, which includes asset managers, pension funds and consulting groups. This is based on the quality of reporting on the seven principles of the code.
Groups that have not achieved at least Tier 2 status after six months will be removed from the list of signatories. Those in Tier 3 include Franklin, Toscafund, Neuberger and Brewin.
There are 120 groups in Tier 1, which include the likes of
But some big institutions such as Pimco Europe,
In particular, asset management groups have come under growing pressure to prevent excessive pay in the boardroom after prime minister
Groups such as Aberdeen, Hermes,
In submissions to a parliamentary inquiry into corporate governance,
In comments to the same committee, Aberdeen proposed that companies that lose pay votes should face a steeper hurdle when it comes to getting revised plans approved. The fund manager said that the threshold for revised plans should rise to 75 per cent.
Franklin, Toscafund, Neuberger and Brewin had not responded to requests for comment by time of publication.
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