MONEY TALK By Christine Farnish Chief executive of the National Association of Pension Funds

Over the past few weeks, the media has made much of an apparent campaign against "fat cats" by the National Association of Pension Funds (NAPF).

This might make good headlines, but isn't entirely fair.

To use the terminology in vogue at the moment, the NAPF is not against "fat cat pay" per se, as long as it is justified through good performance.

In a global economy it is necessary, vital even, that there are global pay packages on offer at UK companies so they can attract global performers - as long as there is global performance.

Last autumn, we and the Association of British Insurers urged companies to stop "rewarding failure" in the form of guaranteed bonuses and other contract terms that weren't linked to performance.

New rules

What is happening now is part of our remit to encourage companies to adopt good corporate practice in areas of disclosure, pay packages and performance.

The NAPF's Voting Issues Service (VIS) has, for some years, been at the forefront of analysis of company governance, looking at the annual reports and advising our members - who represent a fifth of UK stock market investors - on how to vote in annual general meetings.

What has caught the attention this year has been the new government rules requiring full disclosure of executive remuneration packages.

This has allowed a more in-depth analysis of all companies by VIS.

The NAPF can claim some success with companies.

Two years ago, Vodafone was criticised for its corporate governance. Following seven months of discussion with VIS, its last remuneration package was heralded as a "model of good corporate governance".

Companies, themselves, are gradually waking up to the benefits of good governance.

Ten years ago, two (or more) year rolling contracts were common place. Now, two-thirds of FTSE companies apply one-year maximum rolling contracts.

Fat cats and you

So how does this affect you, the individual? If you are a member of an occupational pension scheme or have a personal pension, you may well have concerns about how your retirement pot is doing, especially in this economic climate.

It is vital that companies perform to the best of their abilities so that investors - including you through your pension plan - get the best returns for your money.

Good corporate governance generally translates into better corporate performance and better management of downside risk.

This will lead to well-run companies, boosting economic performance, and benefiting you as a pension saver.

This is an issue where the UK leads the world. We at the NAPF will continue to encourage FTSE companies to maintain this lead. Doing so benefits us all whether we are institutional investors, individuals or companies.