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Investment and Pensions Europe
January 16, 2006
F&C Asset Management has labelled donationsto political candidates and parties as "inappropriate" and called for greater transparency in its revised corporate governance policy on political lobbying and donations.
In a statement released this week, F&C said, "Subject to
legitimate considerations of commercial confidentiality, companies should be fully transparent about what they do and how."
It went on to say that it considered donations made to individual
political candidates, political parties and organisations associated
with political parties as "inappropriate and should be strictly
avoided".
F&C director and head of governance and socially responsible investing
Karina Litvack said, "In general, we believe that companies should
avoid donations to political parties, to organisations closely aligned with
specific political parties, and to individual candidates."
This statement comes in the wake of the current high profile trial of
former Washington powerhouse lobbyist Jack Abramhoff, which focused
attention on politicians who accepted favours and the companies that
financed his lobbying activities, said F&C.
It is also reminiscent of the collapse of American energy giant Enron,
which not only funded American election campaigns but was also found to
have donated roughly £87,000 to the Labour and Conservative parties
in the UK.
Last week, the US-based Council of Institutional Investors (CII) stated
its members would vote on whether companies should provide greater
disclosure about political donations. The CII represents more than 100
pension schemes and institutional investors -- including F&C -- with
more than $2.5tn in investments.
An F&C spokesperson told IPE that it felt "strongly"? about political lobbying and donations, and the implications for socially responsible investing (SRI).
"It is something pension funds should actually look at if they want
to be socially responsible in their investing. If the CII is looking at
this seriously, then it definitely is an issue," he said.
F&C is calling for companies to take measures such as publishing their
overall lobbying policy and objectives, developing a code of conduct on
lobbying, and establishing clear policies on avoiding conflicts of
interest. It also stated that where companies make donations,
shareholder approval must be sought.
F&C stated that it is currently contacting all the companies in which
it invests to alert them to the new guidelines.
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