Some of Britain’s largest investors say plans for a new body to improve relationships between shareholders and UK companies are doomed unless “notoriously low-profile” sovereign wealth funds (SWF) including Norway and Qatar take part.
Economist John Kay is leading calls for the creation of a new institutional investors’ forum to kill off a “get rich quick” investment culture and help shareholders engage with companies more effectively.
Tensions between big companies and their shareholders have intensified in recent months as investors voted down pay proposals in big companies including Aviva, Cairn Energy, Pendragon and WPP. The backlash, dubbed the “shareholder spring”, has cost the jobs of executives such as Aviva boss Andrew Moss, and Sly Bailey, head of newspaper group Trinity Mirror.
Kay wants the new independent body to encourage non-UK investors such as SWFs to engage in collective action with other large investors to boost their influence over company strategy.
But participants are sceptical that these secretive funds will lend their support to such proposals. “I am unconvinced any new forum will see government agencies and SWFs joining together,” said Robert Talbut, chief investment officer of Royal London Asset Management and chairman of the Association of British Insurers’ (ABI) investment committee, whose members account for about a fifth of the UK stock market.
SWFs have emerged as some of the biggest investors in the UK, holding around £3.2 trillion in assets.