Fewer than half the signatories to the United Nations-sponsored Principles for Responsible Investment (PRI) say the organization is sufficiently transparent, and support for its governance structure dominated by asset owners runs at just over 40 percent.
As the PRI undertakes what could be a major overhaul in its governance structures following the exit of several Danish pension funds, an internal survey taken by an outside contractor reveals a desire among its membership for change but with an overall positive reaction.
The PRI started the overhaul early this year after the six pension funds announced they would leave the organization, stating that ‘over a sustained period of time, [we have] observed with concern that the governance of the PRI organization does not live up to the basic standards we as investors would expect of the companies in which we invest.’
Only 35 percent of the members surveyed say they understand the role of the powerful PRI Advisory Council and just 45 percent say signatories to the PRI are given enough of an opportunity to participate in decision making, according to the results of the survey conducted by Right Lane Consulting.
Only 42 percent of those surveyed agree that asset owners, as opposed to asset managers, should have majority rights in the governance structure of the PRI. At the start of the governance overhaul process, PRI said it was not willing to eliminate majority rights for owners.
But members show an overall positive attitude toward the PRI, with 69 percent agreeing with the statement, ‘overall, my organization is very satisfied with the PRI’, and 88 percent indicating that ‘being a PRI signatory enables my organization to publicly demonstrate its commitment to’ responsible investment.
‘We take pride in the positive feedback given by signatories and will continue to build on our strength in these areas,’ says Fiona Reynolds, PRI managing director, in a press release. ‘We’re also determined to enhance our position as the leading global voice on responsible investment. We also direct our focus to the areas where signatories feel more can be done, however, and have scheduled a range of events and webinars to further engage with signatories.’
