Pension fund investors must be careful this AGM season to assess how companies’ response to the pandemic has impacted their governance and workforce practices, the Pensions and Lifetime Savings Association (PLSA) has warned in its updated annual stewardship and voting guidelines.
Since the UK entered the first period of lockdown in March 2020, virtual AGMs have become the “new normal”, enabled in law by the Corporate Insolvency and Governance Act on 26 June 2020.
The PLSA has advised voting against any motion that would make virtual AGMs permanent, rather than specifically linked to government policy, or with a sunset clause attached.
The voting guidelines encourage investors to seek assurances from companies that they are looking at how to use virtual AGMs not only to protect investor engagement opportunities, but also to increase them.
“Investors recognise how incredibly tough the last 12 months have been for companies to navigate,” said Joe Dabrowski, deputy director, policy at PLSA. “Whilst investors fully appreciate these issues, the AGM season is an opportunity for pension scheme trustees and their asset managers to engage with company directors, to revisit environmental, social and governance policies and seize the chance to build back better than before.”