LONDON - The death of Rio Tinto's tie-up with Chinalco is the latest in a recent string of revolts by institutional shareholders who on Friday took a concerted step to arm themselves for a new era of activism.
Rio's climbdown to meet investor demands for a rights issue and a BHP tie-up, follows a huge revolt over bonuses at oil giant Royal Dutch Shell while Lloyds has been publicly berated over its deal with HBOS.
Fund managers had faced stinging criticism from politicians and regulators in the wake of the credit crisis for allowing a culture of acquiescence to prevail in all but the very worst cases of corporate failure.
The Institutional Shareholders Committee (ISC) -- which itself faced criticism over its low-key approach - on Friday published new recommendations which urge fund managers to be forceful and collaborative in taking on company Boards.
The guidelines effectively make it an obligation for institutional shareholders to pile pressure on companies where boards have been reluctant to address investor concerns.
The Investment Management Association caught the mood late last month when it called on fund managers to put a "body on the street" by voting down company resolutions.
"Many boards will not listen to us unless they believe there will be consequences for not doing so. And they will not believe there will be consequences until they have seen there can be," Robert Jenkins, IMA chairman, said
