Active ownership is about using shareholder rights to improve corporate value over the long-term.

We encourage asset owners to engage with companies on issues that may have a negative impact on share value –  including environmental, social and governance issues –  or ask asset managers about the levels of active ownership that exist in their portfolios.

 

Start being an active owner now by asking your…

 

…Fund Manager

Aggressive tax planning has been criticised recently. How do you engage with companies that have low tax charges given that holding such investments and holding such investments represents a financial and reputational risk to you and your clients?

Carbon footprint reporting and reduction is increasingly discussed. How do you discuss this with investee companies and assess their responses?

Voting is a key shareholder right. It has more engagement impact when companies can see the names of their shareholders on the register rather than simply the names of custodians. How do you ensure that the company is aware of who has voted and what the key issues are?

Investee companies should know we want long-term engagement with them. How will you communicate this message and can you describe how you will deliver on it? What personnel will be involved?

Executive pay carries reputational risk.  How do you decide that executive pay is fair in investee companies?

 

…Lawyer

To what extent do you share the Law Commission’s conclusions that trustees “may” consider non-financial factors such as ESG and quality of life?

 

… Investment consultant 

Do you think the impact of climate change on asset returns and correlations can be accommodated by your current models? How should we mitigate this risk?

 

…Actuary & Investment consultant

We want to encourage wealth creation for the long-term.  If we extended the term for recommendations what new types of investment would you be able to suggest to us?

 

…Actuary

Now that the Institute and Faculty of Actuaries’ report on resource constraints is one year old can you say how its conclusions have affected your work?

 

…All

Ownership obligations are increasing for several reasons.  How can you support us beyond your traditional service level?

If we force you to exclude short-term and purely financial risks, those of less than 5 years, what worries you most about the future?

 

Top tips

1. Know what you hold
2. Assess how your investment decisions align with your strategic aims
3. Identify two to three core issues and pursue them by asking asset managers pertinent questions about relevant investee companies
4. Request voting reports from investment managers which include rationales for those cast on contentious votes, whether for or against management
5. Collaborate with other asset owners to maximise impact

Emily Kenway, Head of Projects, ShareAction