Formed in 1990 with just seven members
Formed in 1990 with just seven members
LAPFF has grown to become one of the leading voices in corporate governance and responsible investment in the UK
It is now commonplace for institutional investors to challenge companies about their social and environmental impacts and for directors to face routine questioning from shareholders over boardroom standards. It was not always so. Summarised below are some of the Forum’s highlights over the years.
2019 LAPFF played a prominent role among investors assessing the risks posed by tailing dams, following the Brumadinho disaster in Brazil. This included engaging with affected communities as well as companies. After several years of campaigning for improved oversight of accounting standards, LAPFF helped bring about the replacement of the Financial Reporting Council with the Audit, Reporting and Governance Authority. The Forum ratcheted up its engagement activity on a just transition to a net zero carbon economy
Continued engagement on employment standards led to a proposed shareholder resolution at Ryanair that prompted the Chair to commit to stepping down by 2020 and led to a new Chair and Senior Independent Director at Sports Direct. The Forum began preparations for a new round of climate resolutions through its involvement in the ClimateAction 100+ initiative, and cyber security gained prominence as LAPFF engaged with Lloyds, WPP and IAG on this issue.
LAPFF publishes first climate change investment policy framework; the Forum issues voting alerts at Exxon and PPL which result in historic victories for investors on climate change reporting; LAPFF responds to Government Corporate Governance Green paper highlighting problems with the Financial Reporting Council. The year ends sadly with the untimely death of LAPFF chair, Cllr Kieran Quinn.
LAPFF funds again co-file strategic resilience resolutions, this time with Anglo American, Glencore and Rio Tinto, supported by between 96% and 99% of voting shareholders; support a shareholder resolution with Sports Direct calling for an independent assessment of the Company’s human capital management strategy – this resolution garners support from over half of independent shareholders; attends a record 22 company AGMs resulting in a number of engagement meetings.
LAPFF funds co-file strategic resilience resolutions to Shell and BP AGMs supported by the boards and 98% of voting shareholders. The Forum presses forward on reliable accounts with a new legal opinion questioning the IFRS framework, and continues to extend its global reach by attending AGMs in Switzerland and France.
Forum extends its reach, engaging with companies in 16 jurisdictions, presses on board diversity, with Glencore the last FTSE company with an all-male board appointing a female director, LAPFF executive members attend 19 AGMs.
Whilst LGPS reform rises up the agenda, LAPFF continues to press on media standards and executive pay, engages with companies on climate risk and continues to raise its profile by attending more AGMs.
LAPFF members co-file for an independent chair at News Corporation AGM. LAPFF issues a voting alert at Barclays on CEO remuneration. The introduction of mandatory corporate carbon reporting and a binding shareholder vote on company remuneration policies implemented after years of Forum pressure.
Forum research is published indicating international financial reporting standards contributed to the financial crisis. The issue of phone hacking, media standards and corporate governance are raised in meetings with News Corporation and BSkyB.
Marks & Spencer appoints an independent Chair. The Forum meets the Chair of BP over the Gulf of Mexico oil spill and with Vedanta regarding its operations in India. Morrisons publishes an ethical trading policy after seven years of engagement.
LAPFF members file a shareholder resolution at the Marks & Spencer AGM asking the company to appoint an independent Chair, resulting in 38% shareholder support. The Forum tackles remuneration at meetings with the UK banks.
BG Group discloses a carbon target, FirstGroup appoints an independent monitor of its freedom of association policy following engagement. LAPFF questions 30 companies about auditor independence following the financial crisis.
Voting alerts to oppose remuneration at BP and Shell due to poor links between pay and health and safety performance. LAPFF writes to 101 companies raising concerns about audit practices and proposes tougher carbon reduction targets to government.
Letters sent to the FTSE 350 to promote equal pay for women employees as part of the Forum’s campaign to improve company workforce practices. Publication of updated investor guide ‘Delegating shareholder engagement: Holding fund managers to account’.
Membership grows to 36 pension fund members. After two years of engagement on supply chain labour standards, Wm Morrison agrees to appoint a CSR Manager. The CEO’s remuneration was addressed at a meeting with Royal Bank of Scotland (RBS).
Research on the investment impact of climate change is commissioned by LAPFF and following a meeting, the UK Environment Minister congratulates the Forum for playing an important role in furthering good environmental standards with the FTSE 100.
Nineteen voting alerts are issued for the first ‘say on pay’ votes in the UK. A study is commissioned to examine how retailers implement supply chain codes of conduct. Dixons publishes a labour standards supplier code after three years of engagement.
Regulations are approved in the UK giving shareholders the ability to vote on directors’ pay policies, which the Forum had been lobbying for since 1994. The Forum is involved in drawing up a statement of institutional investor concern over Burma.
The AGMs of Carleton Communications, Cable and Wireless, RBS and Boots are attended by LAPFF to raise concerns about executive pay. LAPFF engages with 36 companies in high impact sectors on environmental management and performance.
New regulations require companies to submit political donations to a shareholder vote, representing the culmination of a ten year campaign by LAPFF. 14 companies respond to pressure to toughen performance targets in long-term incentive schemes.
LAPFF advocates for a shareholder vote on executive pay in response to a government consultation. Letters are sent to 55 retailers on supply chain labour standards and child labour.
A new LAPFF constitution is approved and the first elected Chair is Cllr John McCallum from West Midlands Pension Fund. The Forum publishes a study tracing the rise of non-executive directors on boards, but challenges their degree of independence.
After controversy over Nigerian operations, LAPFF members submit the first UK social issue shareholder proposal to Royal Dutch Shell on corporate responsibility governance. Within a few months most of the resolution’s criteria had been met.
The inaugural LAPFF conference “Challenges and Choices: New Perspectives for Local Authority Pension Funds” is held. Meetings continued with Yorkshire Water on accountability, environmental standards improved and new directors were appointed.
LAPFF meets with Richard Giordano of British Gas regarding controversial pay awards and submits the first ever shareholder proposal on corporate governance issues. After the AGM, Giordano stands down from the remuneration committee.
LAPFF supports an independently appointed non-executive at Yorkshire Water. Lobbying is carried out to promote one-year contracts for directors. Rank, Kingfisher and Great Portland Estates provide shareholders with votes on political donations.
LAPFF facilitates a ground-breaking meeting between Grand Metropolitan and Mexican maquiladora workers on labour standards. Legal & General is amongst the first UK companies to hold a shareholder vote on political donations.
LIMPA is renamed the Local Authority Pension Fund Forum (LAPFF), with 13 members. PIRC is retained to provide research, policy and analysis. Following engagement on corporate political donations, BET commits to putting them to shareholder vote.
LIMPA attends AGMs of British Steel to raise concerns about the controversial closure of the Ravenscraig plant and Fisons to seek a commitment to a reduction in peat production in environmentally sensitive areas. Lewisham joins LIMPA.
LIMPA (Like Minded Pensions Authorities) group formed. First meeting attended by Tameside, South Tyneside, Wirral, Wolverhampton, Tyne & Wear, Strathclyde and Wiltshire. Its scope was defined as responsible investment and collective shareholder action.