U.K.'s NEST creates corporate governance policy

National Employment Savings Trust, London, issued its proxy voting and corporate governance policies Monday, which include supporting corporate remuneration programs that reflect awareness at all pay levels within a company, including paying the lowest-paid employees a “living wage and not the minimum wage,” according to the NEST guidelines.

The “evidence suggests that paying a living wage has benefits for business, individuals and society,” NEST's policy states.

“We're more supportive of the remuneration committee where it considers the relativity of pay internally not just externally,” the policy states.

NEST, which has 4 million ($6 million) in assets and began operations last year, does not vote its shares, giving discretion to its money managers to vote in accordance with their policies, although the NEST policy states, “having our own policy enables us to document our viewpoints and expectations to our fund managers on how companies should function.”

“Having our own established policy in place helps facilitate healthy discussion and debate and allows us to fully participate in the wider dialogue on corporate governance,” the policy states.

“On the few occasions where there are differences, we engage to understand and if possible eliminate those differences,” Heather Tilston, NEST spokeswoman, said in an e–mail. “Over time, when we are of sufficient size we will vote our own shares.” Ms. Tilston didn't provide a time frame or size.

The policy's focus includes corporate leadership, board role and structure, and dividend, environmental and social issues.

NEST worked in developing its policies with its equity fund managers UBS Global Asset Management and F&C Asset Management, as well as The Co-Operative Asset Management, which manages assets under responsible investing polices, and Manifest, a proxy voting and corporate governance services firm.