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AUM in Action

Railpen Hones in on UK Listing Issue

UK pension scheme Railpen has outlined its continued efforts to lead industry action on listing rules and corporate governance standards in its 2023 stewardship report. Railpen noted its ongoing work to advocate for robust asset owner protections in the UK, highlighting that the Financial Conduct Authority’s (FCA) proposed reforms would be more permissive of dual class share structures and would remove mandatory shareholder votes on transactions, such as mergers and acquisitions. Last year, Railpen drafted and co-ordinated a public letter signed by UK pension schemes with a combined £300 billion (US$383 billion) in assets that expressed concern about the FCA’s suggested UK listings rules. The asset owner also ran discussion sessions for other schemes on the topic and met with key UK officials to discuss investors’ concerns. Last year, Railpen sent a letter signed by nearly £500 billion of UK pension scheme assets to index providers to ask them to protect their asset owner clients from any changes resulting from the FCA’s proposals. In addition, the stewardship report pointed to Railpen’s chairing of the Investor Coalition for Equal Votes alongside the US-based Council of Institutional Investors, through which the asset owner has challenged unequal voting rights across the US, UK and elsewhere. “We believe companies with robust corporate governance practices and engaged shareholders are more likely to achieve the superior long-term financial performance that our members need,” said Caroline Escott, Acting Head of Sustainable Ownership at Railpen. “Well-run companies are better placed to effectively manage all relevant risks and opportunities, including those related to environmental and social factors. By thoughtfully engaging with portfolio companies and using the full range of stewardship tools in the toolkit, it is possible to exercise positive influence and create long-term value.”

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