INSIGHT by the International Corporate Governance Network (ICGN)
The International Corporate Governance Network (ICGN) has raised concerns from investors globally on regulatory proposals which could weaken UK corporate governance standards and shareholder protections. ICGN fears this could both undermine the UK’s economic growth and attractiveness as a global financial centre, and create risks for investors’ beneficiaries, including pensioners and savers.
Led by investors responsible for assets under management of around $77 trillion, ICGN advances the highest standards of corporate governance and investor stewardship worldwide in pursuit of long-term value creation, contributing to sustainable economies, societies, and the environment.
ICGN’s Chief Executive Officer Kerrie Waring said: “With this statement, investors wish to engage in a constructive dialogue with the UK authorities and key stakeholders on measures to promote growth, high quality stewardship, and excellent corporate governance. Robust governance structures, high-quality corporate reporting, and strong investor protections are essential to a competitive market which safeguards corporate resilience, long-term value creation and ensures economic growth.” ICGN’s statement, shared today with UK regulators and standard setters, has been co-signed by major investors and associations who represent institutional investors around the world (see co-signatories below). Waring continued “Far from being a barrier to growth, maintaining high standards of corporate governance and shareholder protection enables growth.”
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The UK’s advanced corporate governance standards have inspired regulators worldwide in their own governance reforms and investors have used them as a gold standard when commenting on other markets’ governance and listing requirements, as well as in their direct engagement with companies. The UK’s reputation for high quality listing and governance standards and resultant overseas investor confidence is both a competitive advantage and a positive differentiator for the UK market.
ICGN has cautioned against FCA proposals to replace the current ‘standard’ and ‘premium’ segments with a single listing category, to remove shareholder votes prior to significant transactions and related party transactions, and allow dual-class shares with very few investor protection safeguards. ICGN contends that these proposals will expose investors to undue risk, with potentially significant implications for underlying beneficiaries including pensioners, insurance, and retail investors’ savings.
“At a time when regulators around the world are encouraging investors to play a greater, more responsible, stewardship role in promoting the long-term success of companies, weakening their voting rights will have the opposite effect by inhibiting investor influence. ICGN and investors individually have responded to the FCA’s consultations, but we fear that our concerns are not being heard.”
-ICGN’s Global Policy Director, Séverine Neervoort
| Co-signatories are as follows:
Allianz Global Investors GmbH, Matt Christensen, Global Head Sustainable & Impact Investing
Accident Compensation Corporation, Mark Cross, Chair, Board Investment Committee
AMEC, Fabio Coelho, Chief Executive Officer
APG Asset Management, Claudia Kruse, Managing Director, Responsible Investment Strategy
Assogestioni, Fabio Galli, Director General
Australian Council of Superannuation Investors (ACSI), Louise Davidson, Chief Executive Officer
AustralianSuper, Andrew Gray, Head of ESG & Stewardship
AXA Investment Managers, Gilles Moëc, Head of Research
Baillie Gifford, Sam Rooke, Manager (ESG – Policy, Projects and Regulation)
Boston Common Asset Management, Lauren Compere, Managing Director
British Columbia Investment Management Corporation (BCI), Daniel Garant, Executive Vice President and Global Head, Public Markets
Brunel Pension Partnership, Faith Ward, Chief Responsible Investment Officer
California Public Employees’ Retirement System (CalPERS), Marcie Frost, Chief Executive Officer
California State Teachers Retirement System (CalSTRS), Aeisha Mastagni, Senior Portfolio Manger
Canadian Coalition for Good Governance, Catherine McCall, Chief Executive Officer
Church of England Pensions Board, John Ball, Chief Executive Officer
Columbia Threadneedle Investments, Claudia Wearmouth, Head of Responsible Investment
Connor, Clark & Lunn Investment Management Ltd., Martin Gerber, President and Chief Investment Officer
Council of Institutional Investors (CII), Amy Borrus, Executive Director
Downing LLP, Roger Lewis, Head of Sustainability and Responsible Investment
EOS at Federated Hermes Limited, Bruce Duguid, Head of Stewardship
Etica Funds – Responsible Investments, Aldo Bonati, Stewardship and ESG Networks Manager
Eumedion, Rients Abma, Executive Director
Global Alpha Capital Management Ltd., Qing Ji, Portfolio Manager, Board Director
Impax Asset Management, Lisa Beauvilain, Global Head of Sustainability & Stewardship
Interfaith Center on Corporate Responsibility, Josh Zinner, Chief Executive Officer
Investor Alliance for Human Rights, Anita Dorett, Director
Jupiter Asset Management, Kiran Nandra, Head of Equities
London Pensions Fund Authority, Robert Branagh, Chief Executive Officer
Merseyside Pension Fund, Peter Wallach, Director
Mint Asset Management, Rachel Tinkler, Head of Responsible Investment
Nest, Diandra Soobiah, Head of Responsible Investment
New Zealand Super Fund, Paula Steed, Chief Executive Officer (acting)
Newton Investment Management Limited, Therese Niklasson, Global Head of Sustainable Investment
NILGOSC – Local Government Pension Scheme (Northern Ireland), David Murphy, Chief Executive
Norges Bank Investment Management, Carine Smith Ihenacho, Chief Governance and Compliance Officer
Northern LGPS, Councillor Gerald Cooney, Chair
Pensions and Lifetime Savings Association (PLSA), Nigel Peaple, Director of Policy & Advocacy
People’s Partnership, Leanne Clements, Head of Responsible Investment
Permodalan Nasional Berhad, Ahmad Zulqarnain Che On, President & Group Chief Executive
PGGM, Gerard Fehrenbach, Responsible Investment
Principles for Responsible Investment (PRI), David Atkin, Chief Executive Officer
Railpen, Michael Marshall, Director of Investment Risk and Sustainable Ownership
Robeco, Carola van Lamoen, Head of Sustainable Investing
Scottish Widows, Vicky Grinnell-Wright, Head ESG and Interim Head of Responsible Investment
TD Global Investment Solutions (TDGIS), Priti Shokeen, Managing Director, Head of ESG Research and Engagement, TD Asset Management
UAW Retiree Medical Benefits Trust, Hershel Harper, Chief Investment Officer
University Pension Plan, Aaron Bennett, Chief Investment Officer
USS, Sandra Carlisle, Head of Responsible Investment
Walter Scott, Jane Henderson, Managing Director
West Yorkshire Pension Fund, Euan Miller, Managing Director
Woodsford, Steven Friel, Chief Executive Officer
| All opinions expressed are those of the author and/or quoted sources. investESG.eu is an independent and neutral platform dedicated to generating debate around ESG investing topics.
