Institutional investors set up 'Investor Forum' to campaign for corporate governance reforms

An industry working group has recommended that this forum be operational by June 2014, and that it engage with listed companies annually at a strategy meeting held separately to the results reporting cycle. Two years worth of funding has already been made available to the forum from investors and trade associations.

The Collective Engagement Working Group, which produced the report and recommendations (26-page / 815KB PDF), was formed in April 2013 in response to the Kay Review on equity markets and long-term decision making. It was chaired by James Anderson, a partner at asset management firm Baillie Gifford. In his Government-commissioned review, Professor John Kay recommended the creation of an Investors Forum to hold the companies that they invest in to account.

"The Investor Forum that we have announced today will drive cultural change and act as a mechanism for investors to work together more effectively when there are issues at particular companies that have not been resolved by conventional engagement," said Anderson.

"We insist that improvements in the collective engagement process are not a chimera. They are feasible with consistent and long-lasting effort. Ultimately these improvements can contribute to increased wealth creation by companies and for savers. We must be consistently engaged rather than occasionally outraged or so often apathetic," he said.

The recommendations of the Collective Engagement Group have the backing of trade associations including the Investment Management Association (IMA), National Association of Pension Funds (NAPF) and Association of British Insurers (ABI). The group plans to ensure the "broadest possible range of institutional investors" become involved; particularly international asset owners and asset managers, and sovereign wealth funds.

The forum would be operated by a 'secretariat' to progress its objectives and to manage smaller Engagement Action Groups. These groups would be set up to address and resolve issues of concern at UK-listed companies as they arise, and where there are shared concerns about a particular company. They would be open to overseas investors as well as "traditional UK investors", according to the Working Group.

The Kay Review was commissioned by Government to look at ways to encourage long-term corporate decision-making, and restore public confidence in stock markets. The final report set our 17 recommendations in the form of 'statements of good practice', which Kay said should be adopted into "clear and specific guidance" rather than "detailed regulation".

An 'implementation team' has been appointed to establish governance structures and appoint individuals to the forum. It is expected to deliver a status update report by the end of March 2014.

Business Secretary Vince Cable welcomed the creation of the forum, which he said would give committed investors a "stronger voice". Long-term investors in UK companies should "make a genuine and sustained commitment" to the forum's success, he said.