The National Association of Pension Funds (NAPF) published an update to their November 2007 Guidelines in February 2009.  There are no changes as such to Remuneration Policies but the updates give an indication of how Remuneration Reports in 2009 will be viewed.  The message is consistent with the Risk Metrics Guidance above.  A copy of the NAPF update can be found at www.napf.co.uk or from this site via the link 20090206_NAPF Corporate Governance Policy and Voting guidelines updates 2008-09 - February 2009(3).pdf

The National Association of Pension Funds (NAPF) published their "Corporate Governance Policy and Voting Guidelines" in November 2007.  They can be accessed at the NAPF website www.napf.co.uk or from this site via the link below:

http://strategicremuneration.com/doc/2007_11_26_Corporate_Governance_Policy_and_Voting_Guidelines.pdf

The Guidelines are supportive of the Combined Code and the ABI Guidelines. They contain Global Remuneration Principles that are worth setting out for consideration.

Formulation and Implementation of Policy

Investors expect companies to give a transparent, succinct and easily understood statement of the objectives of their remuneration policies.

In formulating policies and overseeing their implementation, companies should:

· Avoid paying more than is necessary;

· Use company comparisons with caution given the risk of ratcheting up pay with no corresponding improvement in performance;

· Be sensitive to pay and employment conditions elsewhere in the group;

· Avoid rewarding departing directors for poor performance.

Dialogue with Investors

There should be a dialogue between companies and their shareholders on the rewards given to executives and board members, in order to:

· Ensure that the correct alignments are set between executives and shareholders to deliver the company strategy that provides the best return to shareholders;

· Ensure that conflicts of interest are appropriately managed;

· Align the interests of senior employees with shareholders to create value in implementing the company’s business strategy;

· Recognise good performance by the company and individual;

· Encourage the right behaviours to achieve good performance;

· Recruit and retain successful employees by being commercially competitive.