Crisa implementation hangs in balance

By Time of article published Feb 1, 2012

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Ann Crotty

Despite being three years in the making and being in line with international developments, it appears that not even all of the members of the committee that developed the Code for Responsible Investing in South Africa (Crisa) are ready to implement it.

In terms of the code, which is voluntary, institutional investors and their service providers were due to report on the extent to which they adhere to the code by today.

If they are not implementing the code or implementing only part of it, they are required to explain why.

However, by late yesterday few institutional investors had made public any commitment to Crisa. Even fewer had published their record of voting at annual general meetings (AGMs), which is regarded as the most demanding aspect of adherence to the code.

The Institute of Directors, which has been a major driving force in the development of the code, noted recently that from today “institutional investors and their service providers need to disclose in their annual reports, on their websites and through other means of communication with their stakeholders to what extent they are applying Crisa and if they do not apply, why not”.

The larger institutions such as Sanlam, Old Mutual Investment Group SA (Omigsa) and Stanlib acknowledge Crisa but, as of yesterday, had not disclosed any information with regard to whether or not they were complying with it.

Ironically, Sanlam and Stanlib are signatories to the UN Principles of Responsible Investing (UNPRI), which contains similar recommendations and principles to those contained in Crisa.

Omigsa is not a signatory to the UNPRI and it appears that at this stage it does not intend to disclose how it has voted at the AGMs of its investee firms.

Prudential Portfolio Managers, which has a representative on the Crisa committee, told Business Report yesterday that it would not be making today’s deadline.

“We haven’t concluded our internal discussions about how to comply with the code,” said Kerry Horsley, the head of compliance at Prudential.

She added that the code was not as simple to implement as it appeared and that Prudential was not prepared merely to give “lip service”.

At the launch of the code in July last year, Finance Minister Pravin Gordhan warned that if Crisa was not adhered to on a voluntary basis, more regulation might be considered.

John Oliphant, the chairman of the Crisa committee and chief executive of the Government Employees Pension Fund, said institutions that had not prepared for Crisa might be unable to meet its disclosure requirements.

Institute of Directors of Southern Africa chief executive Ansie Ramahlo said Crisa should be seen as a source of competitive advantage.

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