April 17, 2018 / 6:56 AM / a year ago

Boards came under more L&G fund arm pressure in 2017

LONDON, April 17 (Reuters) - Legal & General Investment Management voted against company boards more often than ever before in 2017, opposing directors on issues including climate change, diversity and pay.

And as 2018’s annual general meetings get underway, LGIM said it had written to many chief executives at the world’s largest companies to explain what it wants to see from them.

Institutional investors are increasingly asking asset managers to hold companies to account over so-called Environmental, Social and Governance issues, which can have a large impact on a company’s profits.

LGIM, the fund arm of insurer Legal & General and one of Britain’s biggest asset managers with nearly 1 trillion pounds ($1.43 trillion) in assets, said it had opposed the re-appointment of 2,807 company directors, up from 2,362 in 2016.

It has taken a lead role in improving corporate governance in Britain and elsewhere and its voting intentions are keenly watched by the bosses of Britain’s top companies, in which it is often one of the leading shareholders.

LGIM said it had voted against at least one resolution at 59 percent of companies, against 56 percent a year earlier.

Among British firms, LGIM said it opposed 37 board chairs or the chairs of the nominations committee in 2017 due to their poor diversity, and had opposed 215 remuneration resolutions.

“Due to the media spotlight on failures in corporate stewardship, it can seem as though many companies are not doing a good job addressing ESG-related matters,” Sacha Sadan, Director of Corporate Governance at LGIM, said.

“In fact, the vast majority of companies are making significant progress – we simply believe there is more to be done. The same is true of asset managers. We, too, need to intensify our efforts to help deliver long-term value for clients by actively engaging with companies and regulators.” ($1 = 0.6982 pounds) (Reporting by Simon Jessop Editing by Alexander Smith)

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