A new steering group has been launched by pension funds and investment managers to improve the way the industry conducts stewardship.
The steering group is a joint initiative between the Investment Association (IA) and the Pensions and Lifetime Savings Association (PLSA) and co-chaired by Richard Butcher, Chair of the PLSA, and Archie Struthers, global head of investment governance and oversight at Standard Life Aberdeen.
The new group, which held its inaugural meeting earlier this week, brings together asset owners, investment managers and other relevant stakeholders to consider a range of issues aimed at strengthening the relationship between asset owners and investment managers, including the steps investment managers can take to understand and deliver their clients’ stewardship priorities, the role investment managers’ disclosures play in the information flow between investment managers and asset owners in their approach to stewardship, including how these disclosures demonstrate that the stewardship and investment approaches have been aligned with the clients’ wishes, and the role of asset owners in ensuring stewardship plays a key role in their approach to manager selection and ongoing performance and oversight assessment.
The group will also look at the role the contractual relationship and non-contractual arrangements can play in embedding a long-term focus and clear stewardship expectations, including a consideration of model mandates.
The work of the steering group will respond to the above issues raised by the FCA in its statement on building a regulatory framework for effective stewardship, and help deliver on the recommendations presented by the Asset Management Taskforce Stewardship Working Group in its report, ‘Investing with purpose: placing stewardship at the heart of sustainable growth’, which was published in November last year and aims to better embed stewardship into the investment process.
- Members of the steering group include:
o Richard Butcher (Chair of the PLSA, Managing Director PTL) – Co-Chair
o Archie Struthers (Global Head of Investment Governance and Oversight, Standard Life Aberdeen) – Co-Chair
o Helen Dean (CEO, NEST)
o Rachel Elwell (CEO, Border to Coast Pension Partnership)
o Luba Nikulina (Managing Director, Global Head of Research, Willis Towers Watson)
o Stuart O’Brien (Partner, Sackers)
o Jennifer Ryan (Head of UK Institutional Client Business, BlackRock)
o Robert Walker (Global Co-head of Asset Stewardship, State Street Global Advisers)
IA stewardship manager Sarah Woodfield says: “Investment managers have an important role to play in generating long-term returns for millions of UK pensioners. By working together with pension schemes, we can further embed stewardship within the investment process to ensure our members are delivering long-term sustainable value, that not only meets schemes’ financial objectives, but will also deliver on their environmental, social and governance aims.”
Nest CEO Helen Dean says: “I’m delighted to be part of this steering group. Investors like pension schemes should be active stewards. We have a responsibility to help our members achieve the best long-term returns – investing without engaging is handing over the power of our members’ voices to others.
“With AGM season fast approaching, now is the time for investors to be considering key issues affecting businesses. AGMs are one of the few formal times where shareholders can directly engage with the board and senior executives and have a say in how the company is run.
“We have high expectations for companies we invest in, from having the right corporate governance in place to taking issues like workforce pay and climate change seriously. If we don’t believe there’s enough progress in these areas, we’ll readily vote against management or support shareholder resolutions.”
PLSA chair Richard Butcher says: “If pension schemes are to deliver on an intention to invest in a climate-aware fashion they need to articulate that intention clearly enough that it will be delivered by their agents. This new group will develop ideas for overcoming these barriers and in doing so will significantly move the cause of investing for good forward. I’m personally and on behalf of the PLSA really glad to be involved.”
Standard Life Aberdeen global head of investment governance and oversight Archie Struthers says: “Asset managers must meet, and evidence how we are meeting, the increasing expectations of savers to manage their money in a responsible way. In short, our mandate to operate is dependent on us demonstrating our commitment to responsible stewardship. Our industry is best served if we collaborate closely with asset owners – and their appointed representatives – to manage savers’ assets on the basis of a common understanding, using definitions of success that better reflect society’s expectations. I am excited and feel privileged to be working with this august group of stakeholder representatives on behalf of the IA. Together we can better align and strengthen the common purpose we all share to invest for a more sustainable future.”