'There are no questions we are afraid to ask'

In February an unusual skirmish emerged between Barclays, the UK's largest bank, and the Local Authority Pension Fund Forum, a group of 64 UK public pension funds with combined assets of £160bn.

The clash occurred when Kieran Quinn, chairman of the LAPFF, publicly accused Barclays of stalling on a promise made in March 2014 to replace John Sunderland as chairman of its remuneration committee. The committee had become the subject of widespread investor criticism last year for approving large bonuses despite falling profits, high-profile fines and 12,000 job cuts.

Less than two hours after Mr Quinn published his attack, Barclays responded by stating that Mr Sunderland, who remains chairman of the committee, would retire from his position following the bank's annual general meeting later this month.

The UK lender also rebutted Mr Quinn's claims that Barclays misled investors over the timing of Mr Sunderland's departure, stating it only promised he would leave "at a date to be agreed".

"There has been no breach of 'promise' and nor has Barclays acted in a way which is contrary to any statement we have made," it said.

Mr Quinn, however, maintains the bank has acted disingenuously. The Manchester-born pension fund executive, who skipped university to begin a career as a postal worker in the 1970s, says his organisation "kept the pressure on [Barclays over pay] but turned down some of the gas" last year in the belief that Mr Sunderland would leave his role in 2014.

"The company did not act in good faith and in my view they abused the engagement process. This is an issue of trust, and Barclays got caught with their trousers down," says Mr Quinn, who also chairs the Greater Manchester Pension Fund and is standing for re-election as a Labour party councillor in the Greater Manchester borough of Tameside.

Mr Quinn, a Manchester United fan and father of two, is reluctant to drop the matter despite confirmation of Mr Sunderland's imminent departure. He says Barclays has agreed to let him meet the bank's chairman, David Walker, to discuss pay, a meeting he believes would not be possible "if I was just an irritant or a voice in the wilderness railing against excess".

"The issue remains that the company is still fundamentally taking some of the wrong pay decisions," the 53-year-old says.

It is not just Barclays that has faced pressure from the LAPFF since Mr Quinn was elected chairman of the pension fund body in 2013. The group was outspoken in its disapproval of the lack of gender diversity at Glencore, the mining company, which until June of last year was the only FTSE 100 company without a woman on its board.

The LAPFF has also orchestrated a high-profile campaign, alongside several faith-based institutional investors, to pressure oil groups Shell and BP to provide greater disclosure on the risks posed to their businesses by climate change.

The investors filed shareholder resolutions at Shell and BP in January demanding that the companies provide more information on these risks and on their investments in low-carbon energy research and development.

The resolutions, which will be voted on at BP and Shell's annual meetings in April and May respectively, have won the support of many of the world's largest investors, including Dutch pension fund manager APG, France's Amundi and BNP Paribas, Swedish national pension funds AP2 and AP4, and German asset manager Union Investment. Both companies' boards have recommended that shareholders back the resolutions.

Mr Quinn believes the positive momentum demonstrates the value of shareholder engagement with companies over time, as opposed to divesting from companies that are resistant to change.

He says: "To me, divestment is the easy way out as the problem does not go away. Leaving a problem for someone else to deal with because it is too difficult [to resolve] is not what Local Authority Pension Fund Forum is about. Shell and BP are now prepared to shine a light where there were shadows before."

The next issue Mr Quinn wants the LAPFF to scrutinise is corporate tax avoidance and evasion. "Clearly some of the [examples of tax minimisation] we have heard about recently are not just about clever accountancy - in our view it is very close to criminal activity," he says.

Last year the forum clubbed together with the Quebec-based pension fund Batirente, the UK's Royal London Asset Management and Parisian fund house Ofi Asset Management to call on the leaders of the G20 economies to modernise the international tax framework.

The LAPFF has stepped up its efforts to tackle tax avoidance this year by writing to every FTSE 100 company at the end of March requesting information about their tax affairs. The questions were compiled by Richard Murphy, a UK tax expert who founded the Tax Justice Network, a campaign group, in 2003.

Mr Quinn says the letters form part of an information-gathering exercise to enable the LAPFF to identify which companies are the leaders and laggards in terms of appropriate tax arrangements. The usually forthright councillor is reluctant to explain at this stage what the consequences might be for companies deemed to have aggressive tax avoidance policies, or those that refuse to respond to the letters.

He says: "We are not setting traps here. No one is trying to catch anybody out. We are genuinely trying to have a conversation with these companies to understand what resources they put [towards managing their tax affairs]. [We will not] smack someone over the head who has not been responding."

Mr Quinn acknowledges that getting some companies to respond to the questions will be an uphill battle. "I could write a book one day on the reasons why companies say they cannot give us information," he says.

Nonetheless the councillor says he will continue to ask uncomfortable questions, and he believes the LAPFF is in a unique position to chase answers. He says: "There are no questions we are afraid to ask. We are able to ask questions that some asset managers would come at from a totally different angle, for a start because we are not part of the corporate network within the City of London."

Despite the fact that these campaigns are forcing the councillor to descend upon the UK capital ever more frequently, he says he would never relocate altogether. "I prefer the insane world of Manchester to the insane world of London," he says.

. . .

BornSeptember 7 1961

Education St Bede's College

Total payThe LAPFF role is unpaid

Career1994 Elected as a UK Labour party councillor for Tameside, Greater Manchester

1997 Elected to board of Greater Manchester Pension Fund

2010 Appointed leader of Tameside council and elected as chairman of the GMPF

2012 Joined the Local Authority Pension Fund Forum

2013 Elected chairman of the LAPFF

. . .

Founded 1990

Assets under management £160bn

Membership 64 local authority pension funds

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