Agreement ramps up governance measures

TheInvestment and Financial Services Association(IFSA) has released an upgraded Standard Investment Management Agreement (SIMA), emphasising the importance of active corporate governance.

The SIMA is a standardised document outlining the agreement between trustees and fund managers for the investment of superannuation and managed investment funds.

“The new SIMA will serve to highlight the important issues regarding shareholder activism in the minds of all trustees during the time that mandates are negotiated,” IFSA chief executive Richard Gilbert says.

IFSA says that its policy is that fund managers should vote on all material resolutions where they have the voting authority, and the group’s own research shows that members are active shareholders and are involved with companies in which they are invested.

Gilbert says the new agreement will require fund managers to provide trustees with their proxy voting policies and report on their voting activities.

“The changes to the SIMA reinforce what has been IFSA’s policy on corporate governance for many years,” Gilbert says.

“While fund managers have been providing this information where requested, the new SIMA should lift the awareness of corporate governance activities by trustees,” he says.

Gilbert says that IFSA has also encouraged its members to disclose their proxy voting policy on their web sites, in order to raise the level of awareness of corporate governance among retail investors.