Global Trends in Corporate Governance – new research by MM&K and our partners in the GECN Group
The global investment landscape is changing. Investors are under increasing pressure to consider carefully the long-term sustainability of their investments and to demonstrate that their engagement and investment strategies are designed and executed with the best interests of the end-beneficiaries in mind. The revised UK Stewardship Code, published on 24 October is evidence of this. Consequently, investors are making more demands from their portfolio companies particularly in the area of engagement.
MM&K, together with our partners in the GECN Group (Global Governance and Executive Compensation Group) recently interviewed 25 global investors to understand the issues which are of most concern to them, their views on the way companies engage and their thoughts about the most important future trends.
Board effectiveness is a key issue for investors and from Australia and Asia to the EU, UK and US, three high-profile issues consistently emerged in connection with environmental, social, and governance (ESG) concerns:
(1) Climate change
(2) Human capital and diversity
(3) Executive pay.
During the interviews, investors expressed deep concerns that corporations are not providing enough transparency in their disclosures to show alignment between shareholder, other stakeholder and executive interests on these issues.
The research highlights the importance of corporate responsiveness and engagement with investors and provides insights into the areas in which investors and other stakeholders are challenging corporations and governments to look beyond shareholder value and “do the right thing”.
The report on this research, which also identifies approaches companies can usefully adopt to gain most value from their investor engagement programme, will be available shortly. An executive summary is available now. To receive your free copy, please click the link below.