What is capital stewardship?
Worker's Capital Grows in 2009 to $23.3 trillion, as pension fund assets reach 70% of World GDP
Research produced by Towers Watson shows the extent of the bounce back in value of assets held by the world's largest pension funds. Towers Watson estimate the value of our assets to have reached $23.2 trillion in 2009, up 15% on 2008 the year in which the world's economy was bought to the brink of collapse by the world's largest banks. Of course asset values do not bring income into pension funds, it is the returns from the assets that help pay our pensions and these have been in decline. But higher asset values will help the coming LGPS valuations they will hopefully reduce the funding gap.
Of the "P13" countries covered in the http://www.towerswatson.com/research/972 It is estimated that occupational pension schemes and small savers "own" more than 50% of stock in the world's major companies. Assets of pension funds are at risk if fund boards and their investment panels are given poor advice by investment professionals. Assets are also at risk if funds are invested in badly-managed companies - for example, those which are exposed to risk by failing to comply with legislation, or whose activities result in bad publicity and damage to their brands. Capital stewardship is aimed at engaging with companies in which our members have shares to ensure they are innovative, well-managed and not taking undue risks with our retirement savings. In the recent period, the TUC's capital stewardship work has included scrutiny of executive remuneration packages at GlaxoSmithKline, Corus, HSBC and BskyB. The TUC sent voting alerts to its Member Trustee Network advising trustees of its opposition to particular board remuneration proposals. Through their ownership of company shares in the UK and overseas, UNISON members are effectively joint employers, along with other pension scheme contributors and small investors, of workers in the private sector both here and abroad. Capital stewardship also aims to ensure that pension funds do not sit idly by when companies engage in activities to which members have expressed their opposition, such as poor environmental standards, bad labour relations, excessive executive pay and poor social responsibility. UNISON's Capital Stewardship Programme aims to ensure that our members' interests are actively pursued through representation on fund boards and investment panels and by engagement with the companies which our members "own" or lend money to.
