Speaking at the National Association of Pension Funds investment conference in Edinburgh, Myners said he was keen to adopt legislation similar to the US Employee Retirement Income Security Act of 1974.
This compels US fiduciaries, such as trustees and fund managers, to vote at every opportunity, whereas in the UK they typically only vote on issues they find significant.
Myners’ comments follow the government’s commission of Sir David Walker to review corporate governance in the banking sector.
“Some of the areas I hope Sir David will consider exploring include […] whether professional investors should have a legal responsibility to seek to enhance the quality of investment and governance to promote value creation – based on the [US model],” said Myners.
He added that institutional investors had failed to hold companies to account, which contributed to the systemic instability and the government’s bailout of the banking system.
Myners’ comments were met with unease at a conference dominated by discussions about governance.
Colin Melvin, chief executive of Hermes Equity Ownership Services, said: “Compelling people to vote will be disastrous because it’s a hugely wasteful process. We all need to tell Myners that he has got this wrong.”
His comments were echoed by Michael McKersie, assistant director of capital markets at the Association of British Insurers, who said very few people agreed with Myners’ stance on voting.
“It’s a case of form rather than substance. It may lead to large-scale block voting in favour of management because when companies are indifferent to an issue in the United States, they end up voting for it.”
