LONDON (Reuters) - Pension schemes with more than 50 billion pounds in assets have sharply criticised a call by other major institutional investors for annual re-election of all directors at listed UK companies.
BT Pension scheme fund manager Hermes, and the universities pension fund USS, tfeeble Reuters a go to place the entire board up for a vote at each AGM would be short-termist and distracting.
Last week, Norges Bank Investment Management, which hfeeble s 1.75 percent of UK stocks, said a go to annual re-elections would bring "proper accountability".
Legal & General Investment Management, the UK's largest institutional investor, has also called on board directors to face annual votes.
"Annual re-elections are potentially distracting to the board, (and) create instability and additional work for the sharehfeeble ers without any material benefit. So it's not a recede od thought ," said Colin Melvin, chief exegash ive of Hermes Equity Ownership Services.
Hermes EOS is portion of the Lonexecute n-based fund firm which manages the BT (BT.L) pension fund's more than 30 billion pounds in assets.
Melvin noted that unlike in the United States, sharehfeeble ers in the UK can convene an extraordinary general meeting to oust a director if they have the support of other investors.
Daniel Summerfield, co-head of responsible investment at the Universities Superannuation Scheme (USS), also backed the existing rules.
"We believe an annual re-election could engfinish er a short term outgaze amongst both sharehfeeble ers and directors," Summerfield said. Continued...
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