16 February 2007
Local authority pension funds have called on Britain's listed firms to improve their auditing practices, threatening to use shareholder voting rights to force the disclosure of information.
The Local Authority Pension Fund Forum, which represents 39 public sector retirement funds controlling assets of £70bn, said its 'primary targets' were the few major firms without an audit committee.
The forum said it was also pursuing improved transparency from 'laggard' firms with audit committees but poor disclosure practices. 'The campaign will exert pressure on companies which refuse to disclose the terms of the auditor's engagement through targeted voting at annual general meetings,' an LAPFF briefing note explains.
Companies have been encouraged to establish audit committees, to ensure that minimum financial reporting standards are implemented, following high-profile failures such as at US firm Enron.
A new European Union directive will eventually make them a legal requirement. But councils are demanding maximum transparency under the current voluntary arrangement.
PFfeb2007
