Pension funds in fresh broadside against London Stock Exchange
The exchange’s recent push to soften boardroom rules for listed companies has come under renewed attack by a group of local council schemes.
A group of local council pension funds has launched a fresh attack on the London Stock Exchange (LSE) for what it sees as a push to lower boardroom standards for listed firms.
The Local Authority Pension Fund Forum (LAPFF), which represents 87 local authority schemes, said it was “resolute” in its concerns about the stock exchange boss Dame Julia Hoggett’s recent push to reforming listing rules.
As well as being the LSE’s chief executive, Dame Julia leads the Capital Markets Industry Taskforce (CMIT), an industry group that has resisted attempts to strengthen the UK’s corporate governance code.
Dame Julia has also publicly complained that chief executives on the stock exchange are not paid enough to attract the best candidates for top jobs, compared to outsized salaries and bonuses in the US.
This has led to concerns that governance rules on pay could be watered down, such as a requirement for companies to engage with investors when more than one-fifth of them revolt over directors’ remuneration.
The letter, dated August 30, is the third time the forum, whose members manage £350 billion of assets, has complained on the matter.
Meanwhile, the CMIT has argued that easing listing rules will attract more company founders to choose London as their desired location to float on the stock market, rather than alternatives such as New York.
But Mr McMurdo wrote: “We would point out that the cost of capital is set by investors in the markets, not lawyers, nor the sell-side, yet those are the only interests that have been represented by the CMIT, in our view.”
He added: “It is a case study in how governance of capital markets should not be conducted.”
The LSE Group was approached for comment.
