Two major statements about institutional shareholder activism were published in October; the first by the Institutional Shareholders’ Committee (ISC) and the second by Hermes Pensions Management (Hermes). For listed companies, these provide an insight into institutional thinking, an indication of the practical implications of the institutional shareholder activism debate and a forewarning of the questions that companies may be pressed by their shareholders to answer as they move into the next cycle of annual reporting and general meetings.
Cynical observers have viewed the ISC publication merely as an attempt by institutions to ward off a threatened change in the law, following the Myners report, which would place them under a duty to intervene in companies if to do so would be in the best interests of shareholders and beneficiaries. Opposition to that proposal certainly seems to have given a new lease of life to the ISC, an umbrella body for the Association of British Insurers
