The 'two-strike rule' on remuneration has improved corporate governance by making company directors more accountable to their shareholders, according to AMP Capital.
The investment manager has been a long supporter of the rule which was brought in on 1 July 2011. It can call for a whole board to be re-elected if a significant proportion of shareholders disagree with the amount directors are paid.
AMP Capital head of ESG research Dr Ian Woods said the increased scrutiny of remuneration reports has led to improved discussions on other governance factors throughout the recent Annual General Meeting (AGM) season.
"This AGM season we've seen a dramatic increase in the number of companies seeking to engage with us," he said.
"This has provided an opportunity to not only get a greater insight into a company's priorities through more transparent remuneration structures, but also to raise other important issues."
Woods says the increased engagement is an important part of being an active shareholder.
"As a large investor and owner of companies on behalf of our clients, we have a responsibility to engage with boards on a broad range of issues such as management of talent, environmental risks and sustainable practices," he said.
The corporate governance report also provides an update on gender diversity on boards.
It found that in 2010, 60% of boards had no women directors on them, but now this number has dropped to 39%.
"Since 2010, there has been clear evidence that progress has been made with regard to increasing the gender diversity of listed company boards of directors," said Woods.