NEST sets out expectations on corporate governance through UK voting policy

NEST (National Employment Savings Trust) has today published its UK voting policy setting out NEST’s views as to how we expect UK corporates to act and how NEST intends to be an effective steward.

NEST believes that sound corporate governance can contribute to long-term economic value for the millions of members we expect will be saving in NEST. As an investor for the long term we also have a special responsibility to encourage companies to be mindful of their impact on the society and the environment in which they operate. NEST believes companies that do so have a better chance of sustaining long-term economic success.

NEST’s policy has been developed in partnership with our responsible ownership partners – The Co-Operative Asset Management and Manifest; its equity fund managers – UBS and F&C, as well as being underpinned by industry best practice set by FRC, ABI, and NAPF.

NEST aspires to be a leader in the UK on ownership and governance. Our assets under management are expected to grow significantly over the coming years and as they do so our approach to executing our voting policy will develop accordingly. Our voting policy will be used at this stage of our development to:

• hold our fund managers to account on the decisions they make
• set expectations on how NEST believes companies should behave
• direct engagement with the companies we invest in
• take part in wider debate on corporate governance with regulators and government.

Speaking at a roundtable to discuss NEST’s approach to investing responsibly, Sharon Darcy, a NEST Trustee Member said:

‘We believe automatic enrolment heralds the start of a quiet shareholder revolution. Through their workplace pensions millions of UK workers will gain ownership stakes in companies across the UK and around the world. We believe many of our members will have a keen interest in ensuring companies are profitable and sustainable for the long term and by doing so provide increased security and prosperity for our members in retirement.’

Commenting on the policy release, Mark Fawcett, NEST’s chief investment officer said:

‘NEST continues to deliver on its commitment to act as a responsible owner of assets on behalf of our members and aspires to a world class responsible investment approach. We believe responsible investment supports long-term value, reduces risk and supports better member outcomes.

‘The publication of our voting policy lets companies, fund managers and our members see what’s important to NEST and how we want to work with them for the future – which is collaboratively, constructively and to achieve great outcomes for our members. This voting policy is an important step to achieving our ambitions.’

Read our Approach to corporate governance and policy on voting (PDF)

View our Voting guidelines - a summary for members (PDF)