Corporate governance

Corporate governance has been a topical issue among institutional investors in the United States and United Kingdom for quite some time, in part because of its positive impact on performance.

'Comply or explain'

Corporate governance in terms of the 'comply or explain’ rule in the Corporate Governance Code has been embedded in Dutch law since 31 December 2004. That means it is a compulsory element in the annual reports of listed companies. The Code stipulates that institutional asset managers like Pensioenfonds Horeca & Catering must pursue a policy for exercising the voting rights attaching to the shares of such companies, and must publish these particulars.

Pensioenfonds Horeca & Catering has taken note of these developments and began implementing its voting policy on Dutch shares in 2005. For this purpose it works in tandem with institutional investors affiliated to Eumedion.

Active Voting policy

Pensioenfonds Horeca & Catering invests worldwide with the assistance of external asset managers. To send a representative to all shareholders’ meetings, or delegate that task to asset managers would be inadvisable on grounds of cost. Pensioenfonds Horeca & Catering therefore decided in the first instance to vote only at the shareholders’ meetings of Dutch companies in its investment portfolio. In the case of foreign investments, asset managers have been authorised to exercise voting rights at shareholders’ meetings on behalf of Pensioenfonds Horeca & Catering as they see fit.

Pensioenfonds Horeca & Catering observes an active voting policy on shares of listed companies. In 2006 voting took place through Eumedion, the interest grouping of institutional investors established in the Netherlands. Members of Eumedion share out a number of annual general meetings (AGMs) of shareholders of Dutch companies. After studying the relevant documentation, Pensioenfonds Horeca & Catering authorises other institutional investors to speak and vote on its behalf at the meeting. In 2006 Pensioenfonds Horeca & Catering attended the AGMs of two Dutch companies with authorisation to vote by proxy for other Eumedion members.

Voting at these shareholders’ meetings complies with the voting guidelines obtained in de corporate governance code. For more information see the Eumedion website.