Twenty financial investment companies have eliminated themselves as signatories to the Financial Reporting Council’s Stewardship Code after being informed in November that they had to make “substantial reporting enhancements”, and being provided 6 months to do so.
Personal equity companies Apax Partners and Dunedin, and fund supervisor PGIM Fixed Income do not appear on the list of companies which have registered to the code. The companies did not react to ask for a remark.
Produced by the monetary crisis, signatories to the code should report on concerns such as ballot, disputes of interest and other disclosures at the companies where they have stakes, with the objective of enhancing long-lasting returns for financiers.
In November, the FRC divided its signatories into 3 tiers. Forty were ranked as Tier 3– the most affordable tier of business– and offered 6 months to enhance their reporting requirements.
The FRC stated at the time: “Their declarations continue to be generic and offer no or bad, descriptions where they are leaving from arrangements of the code.”
Today, the FRC stated it had engaged with Tier 3 signatories and 20 had enhanced their declarations to Tier 1 or Tier 2 basis. The other half “opted to eliminate themselves from the list of signatories”. The Tier 3 classification has been eliminated.
David Styles, head of business governance at the FRC, stated the organization was not dissatisfied by the 20 companies’ choice as there was “no calculation to register to the code” and there were existing checks and balances in place.
“It is much better than those that do not want to register do not,” stated Styles, as it may run the risk of turning it into a tick box exercise.
Designs included that the FRC ran a constant procedure and discussion, which suggested the door was constantly open for companies that wished to engage as signatories of the code.
Wealth supervisor Charles Stanley, hedge fund supervisor Toscafund Asset Management and Neuberger Berman, which all included in Tier 3 in November, have gone up to Tier 1. Franklin Templeton has advanced into Tier 2.
Rogge Partners, which appeared on the Tier 3 list, was combined into Allianz Global Investors in July and as such, looks like part of its parent company in the Tier 1 area.