Hewitt targets pension funds

TRADE Secretary Patricia Hewitt will today challenge pension funds to get their house in order following the onslaught on fat-cat pay and the lack of boardroom independence.

Despite some investor revolts - most recently at Carlton - Hewitt will scold big City shareholders for being too passive, unaccountable and out of touch.

'Too many fund managers, when faced with under-performance, continue to support inadequate management,' she will tell a seminar hosted by fund management group Hermes.

'Others simply pull the plug and switch investments. So a merger or takeover becomes the only route to replacing failed management.'

Controversially, she will back rebel shareholder Fidelity and others who ousted Carlton chairman Michael Green last month.

She will say: 'I will stand up for the rights of shareholders - as the ultimate owners of a company - to take this sort of action.'

Hewitt plans a crackdown on big shareholders who fail to vote at annual meetings. She argues that fund managers 'need to become accountable' to the millions whose savings they handle, and that active investors create better businesses.

Some fund managers may find criticism hard to swallow from a Government that made a £5bn annual tax grab on pension fund dividends and hit utilities with a £15bn windfall tax.