One of the beauties of democracy is that we can readily see how our elected representatives are serving us.
Just a quick look online will rapidly reveal which MPs have been present at which debates and how many votes they have participated in.
I think fund managers should also declare on an annual register how many company meetings they have been to.
Many fund managers talk openly about the countless company meetings they have as part of their analysis of which businesses to invest in, and while there is no reason to believe they are lying, wouldn’t it be great if the amount of shoe leather they had expended was there for all to see.
The register should be voluntary as those who did not state their company meetings could then be asked by investors why they do not list their meetings.
It could, perhaps, be that the style of the manager means they do not meet company management but just derive what information they need from publicly-available information. This could be declared on the register.
There could also be scope for managers to record how they voted at annual general meetings to show investors how active they are being as shareholders and also to record businesses they met but decided not to invest in.
This would give investors the information they wanted in terms of understanding how their fund managers are trying to shape the businesses they invest in and also provide an insight as to how the fund manager uses their time.
Fidelity’s global chief investment officer for equities Dominic Rossi has been vocal about not backing companies whose incentive plans are too short term.
In August, Mr Rossi said he considered incentive plans that were less than three years “too short”.
“Last September we informed our UK and European investee companies that we would use new powers [introduced by Business Secretary Vince Cable] to seek to extend the minimum share retention period,” he said.
“Specifically, from 2014, we would only support those companies that extended the holding periods for long term incentive plan awards for more than three years and from 2015 only those companies that extended holding periods to five years or more.
“We would vote against any companies which did not comply, even if every other aspect of the company’s policy on pay was acceptable.”
Mr Rossi has already said what percentage of remuneration proposals the company has voted against year-to-date and I am sure he will continue to be open about this.
But wouldn’t it be great if this information was annually available to investors so they could see for themselves who is paying lip service to being an active shareholder and who is actually being one.
Bradley Gerrard is news editor at Investment Adviser
