One of the UK’s biggest investors has called for improved corporate governance in infrastructure companies.

Hermes Investment Management wants to see boards overhauled, the introduction of shareholder committees, and the alignment of executive pay to social and environmental factors, the investor reveals in a new report.

Peter Hofbauer, head of infrastructure at Hermes Investment Management, said: “Few asset classes are as necessary, or significant, to the daily lives of individuals as infrastructure. These businesses, which can provide essential social services, including access to water, energy, health and social care, and vital transport services, are the basic physical and organisational structures and facilities needed for the operation of a society.

“However, ownership of these assets continues to transfer from the public to the private sector. While the listed company corporate governance guidelines are helpful, some of the principles may not be appropriate (nor accepted) in a more bespoke private market environment. The result, therefore, may not always be a consistent, or optimal, outcome for investors, employees and other stakeholders.”

Hermes would like to see boards review their effectiveness, and introduce independent chairmen and a minimum number of independent directors.