Major UK pension scheme investors have launched the Governance for Growth Investor Campaign (GGIC), aiming to champion savers’ interests through a governance for growth approach, thereby accelerating UK economic dynamism and supporting UK capital markets.

The initiative features UK pension schemes including Brunel Pension Partnership, The Church of England Pension Board, People’s Pension, Brightwell, and Railpen.

The campaign’s launch follows the announcement of the government’s Leeds Reforms, the first anniversary of the Financial Conduct Authority’s UK listings reforms and amidst a continued decline in initial public offerings (IPOs).

The campaign’s advocacy will be focused around four policy pillars, designed to put the saver needs at the centre of capital markets policy-making.

These include calling on policymakers to involve pension schemes in policy discussions on the UK’s capital markets and corporate governance standards, including participation in the new Listings Taskforce.

It also will focus on addressing the artificial differences between private and public markets, working collaboratively with government to promote the UK's governance standards internationally, including on international trade missions, and empowering schemes to help companies grow by recognising the importance of shareholder rights.

In particular, the GGIC will engage in the immediate term on the upcoming UK Draft Audit Reform and Corporate Governance Bill to support important shareholder tools, maintain a strong reporting and assurance framework for large private companies, and promote clear discourse on voting outcomes by companies with unequal voting rights.

The campaign said the GGIC members will welcome the government’s commitment to the UK Draft Audit Reform and ensure shareholders can engage meaningfully with their portfolio companies, support high-quality audits for large private firms, and encourage better reporting on vote results at companies with unequal voting rights.

The campaign will focus overall on longer-term, strategic relationship-building and awareness-raising with political and policy decision-makers around these four pillars.

The GGIC argued that sustainable growth requires good governance and that UK schemes should be given more influence to help companies within private and public markets frameworks to grow and support long-term value creation.

The campaign will aim to highlight how good governance and shareholder rights help companies perform better by promoting transparency and accountability.

It also said it sees global uncertainty and the weakening of investor rights elsewhere as a chance for the UK to stand out as a stable, attractive place for long-term investment and growth.

Following the publication of the Financial Services Growth and Competitiveness Strategy last week, the group are keen to work with the UK government on a governance-focused approach that supports business growth and strong capital markets.

The GGIC also welcome efforts to boost liquidity for UK-listed companies, such as efforts to increase retail investment.

Railpen head of investment stewardship and co-head of sustainable ownership, Caroline Escott, said: “Today’s launch comes at a vital moment for the UK’s capital markets and economy.

“Over a year on from the general election, this government is making welcome headway on its reform agenda, providing the stable policy platform needed on issues including pensions, financial services, planning and industrial development to overcome the country’s economic challenges and kickstart growth.

 “Damaging to this drive is the misperception that the UK’s historic world-leading corporate governance and shareholder rights mechanisms unnecessarily hinder growth, rather than providing the UK with a key differentiator and supporting long-term value creation in the interests of everyday UK savers.”

Escott said that last year’s UK listing changes “watered down” many longstanding shareholder rights, which to date do not appear to have had a positive effect on the UK IPO environment.

She said the campaign group will instead put the evidence-based, governance for growth case to policymakers, and will work with others across the industry to highlight how good governance works together with a growing economy and thriving capital markets.

Adding to this, Brightwell chief investment officer, Wyn Francis, said strong governance should not be viewed as a “barrier to growth but a catalyst for it”.

“Well-run companies that are transparent and accountable are more likely to succeed over the long term,” Francis continued.

“This initiative is about making sure our voice is heard in shaping the future of capital markets because good governance isn’t just good practice, it’s good business.”

Escott also emphasised that at a time when government is urging UK pension schemes to “boost the economy”, it’s “fundamental” that pension schemes have a seat at the capital markets and corporate governance policymaking table to make the case for sustainable growth.

She noted that the government’s announcement that it will establish a Listings Taskforce has encouraged many across the sector and provides an opportunity to set a precedent around involving pension schemes and utilising their expertise.

Brunel Pension Partnership chief responsible investment officer, Faith Ward, said good governance and an enabling environment for investors to ensure long-term value creation are “paramount” to meeting the objective of growth in the UK.

Church of England Pensions Board CEO, John Ball, commented: “There is a vital role for UK pension funds to play in contributing to and shaping a growing UK economy that can serve the interests of the many millions of UK pension savers. 

“Whilst ensuring an efficient market is vital to the government’s growth agenda, it is also important that we do not throw away the lessons learnt of good corporate governance and of past corporate failures and financial crises.
“This campaign places good corporate governance at the heart of an agenda to support long-term sustainable growth in the UK.

“The UK can be the home of best practice and corporate governance, attracting both domestic and international investment in well-governed companies.”

People’s Partnership head of responsible investment, Leanne Clements, added that now more than ever in this “complicated policy landscape”, it is essential that owners of capital come together to proactively engage with UK policymakers on key corporate governance issues that will impact millions of savers.

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