Principle 5 - Our willingness to act collectively with other investors
The company is willing to act collectively with other UK and overseas investors in order to protect and enhance shareholder value or to otherwise address issues that are relevant to our clients’ best interests. Common topics for collective engagement include succession, board composition and nominations process, remuneration, audit and audit tenders, strategy and performance, risk appetite and risk management, human rights, labour concerns, and the environment.
In 2014, following the approval of a controversial remuneration scheme by a narrow margin at the AGM of a high profile clothing retailer we, along with other investors, began to engage with the company to express our concerns about governance arrangements more generally. We continue to act with other investors in order to encourage an improvement in governance practice within this company.
In deciding whether or not to act collectively with other investors, we take into account a range of factors. In particular, these include:
- whether or not collective engagement is likely to be more effective than unilateral engagement;
- the degree to which the objectives of the other investors are aligned to our own;
- the need for confidentiality; and
- the context of the investee company and, exceptionally, the wider economy.
To assist us to participate effectively in collective engagement we maintain good working relationships with other institutional investors and we support collaborative engagements organised by representative bodies and others, when they are aligned with our clients’ interests. Refer to Principles 2, 3 and 4 for additional information regarding our approach to engagement and conflicts of interest.
We work with a number of organisations in order to participate in collective engagement including:
- Global Investors Governance Network
- Global Corporate Governance Forum
- Asian Corporate Governance Association
- The Investor Association
- Council of Institutional Investors
- The Investor Forum
- The PRI
- The 30% Club Investor Group
One of our Analysts recently attended an investor roundtable with representatives from the UK soft beverage industry to discuss its response to concerns about sugar and health. The roundtable covered regulatory risk, particularly in the UK; actions taken by the industry to help consumers make healthier choices; options for greater transparency on sugar; and the options available to the soft drinks industry to reformulate products to reduce the sugar content.
As investors, we look to understand how food and beverage companies are managing health and wellness through their business strategies.