On 7 October, Richard Davies, Managing Director of RD:IR, moderated the IR Society’s second 2015 Corporate Governance Seminar. Hosted by Instinctif, the 40-strong audience heard from a knowledgeable panel of speakers on topics broadly around the theme of “Collective Engagement: the next step in Governance”
The event was kicked off by a panel including representatives from The Investor Forum, a body formed following the recommendations of the Kay Review and subsequent Collective Engagement Working Group (a group established by the ABI, IMA and NAPF); Emily Carey, BP; and David Trenchard, David Trenchard Consulting. The Investor Forum is an investor-led organisation, whose governance is independent of any trade association, and which was represented on the panel by Simon Fraser (Chairman), Andy Griffiths (Executive Director) & Phineas Glover (Senior Advisor). The three speakers outlined the purpose for the formation of The Investor Forum, namely to position stewardship at the heart of investment decision-making by facilitating dialogue, creating long-term solutions and enhancing value. They also talked through the engagement process, explaining how they would typically get involved in helping companies and investors to agree courses of action to achieve their stated goals in a confidential environment. Following the presentation, a discussion between the panel and participants from the audience ensued, with several different points of view being aired and addressed by The Investor Forum team.
The next presentation was given jointly by David Trenchard, David Trenchard Consulting and Cas Sydorowitz, Georgeson on “Framing Activist Risk”. They compared the typical US model of activist investment against the European model, as well as examining the difference on how activism is perceived in both geographies. There were some fascinating insights and behind the scenes information about how activist funds operate, and real examples of companies who had successfully defended themselves against activism.
Mark Robinson, Senior Client Manager for EMEA Issuers, RD:IR, followed with a talk on Depositary Receipts (DR’s) and the governance issues surrounding this equity instrument. He highlighted, among other issues, the lack of transparency in ownership as something for companies to consider when issuing DRs. Representatives from depository banks in the audience contributed views and insights from their perspective to provide a useful background to the topic.
Finally, Will Pomroy, representing the National Association of Pension Funds (NAPF), posed the question “Where is the workforce in corporate reporting?” His presentation looked at how companies regularly report on directors’ remuneration in their annual reporting but seldom report in any depth on other workforce metrics. He argued that “for long-term investors, conversations about the people that constitute the workforce are crucial to understanding a company’s culture, how well a company is functioning and whether warning lights are beginning to flash”.