SLI reveals how it forced changes on board policies

STANDARD Life Investments (SLI) has lifted the lid on the pressures it applied on the boards of companies such as Aviva, Barclays and Vedanta.

The company, which manages £163.4 billion in assets including its stakes in major firms, said it “robustly” spoke out against executive bonuses at Barclays.

Its first governance and stewardship review, published yesterday, reveals that it urged Barclays’ board to accept measures to align bonuses with performance.

The bank’s former chief executive Bob Diamond was awarded a reduced £2.7 million bonus for 2011 despite the bank missing his own targets, albeit this was part of a package that exceeded £6m.

SLI added that it voted against the re-election of the chairman of the remuneration committee, Alison Carnwath, who resigned in July.

The Edinburgh based money manager also highlighted that industrial conglomerate Vedanta, owned by Indian magnate Anil Agarwal, was a long-term investment although it has “unusual governance features”.

The review said Vedanta had hired a non-executive director, Geoffrey Green, on the insistence of SLI, although it added that the move was “not enough to address our concerns” over independence.

SLI confirmed that it will “escalate” its engagement with the Vedanta board “should there be no improvement in board composition”.

It also confirmed that it voted against the remuneration report at insurance giant Aviva which led to the departure of chief executive Andrew Moss last year.

Guy Jubb, SLI’s head of governance and stewardship said the “need for change and improvement in governance and stewardship is beyond dispute”