NAPF's relationship with RREV is creating 'conflict of interest'

Professional Pensions 2 June 2005

The National Association of Pension Funds' stake in corporate governance firm RREV is creating a 'conflict of intests' for manaers, proxy voting service Manifest claims.

Manifest says the NAPF's joint ownership of Research Recommendations and Electronic Voting with Institutional Shareholder Services is could mean fund managers feel compelled to adhere to the firm's recommendations.

Manifest managing director Sarah Wilson says that the NAPF's commercial involvement with RREV could have an effect on the advice it gives to its members.

She said: "Trade associations have responsibilities under law to their members, and by having an exclusive relationship with RREV it creates a conflict in giving advice to those members. It is paramount that people realise that the NAPF guidelines are market-based.

"There are fund managers who do not want to use the RREV service yet they are compelled by clients to do so, who are under the impression that RREV is the NAPF. It compromises a fund manager's ability to provide the best possible service to their clients."

However, an NAPF spokesman dismissed Manifest's concerns. He said: "There is no evidence to that effect. Regardless of whether it's RREV or its predecessors we have come out and said what we think in plenty of cases in the past.

"We have never seen any evidence to support that accusation. RREV's recommendations and research is based purely on the NAPF governance policy."

Wilson also claims the the government's new corporate manslaughter Bill could create another regulatory burden on firms while doing nothing to prevent further deaths.

She said: "There are many companies which have implemented good health and safety practices but I am not sure if the manslaughter bill will prevent another Alpha Piper disaster or a Hatfield rail crash. No-one an ever be complacent when it comes to protecting people."

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