The Best Practice Principles Group (BPPG) has launched a consultation seeking views from investors and companies on whether the best practice principles for shareholder voting research and analysis have been effective in ensuring the integrity and efficiency of the services provided
The principles, first introduced in 2014, were developed by the industry as a voluntary standard. The aim was to promote a greater understanding of the role of shareholder voting research providers and provide more transparency about their activities. They are global in their scope and can be used by any organisation providing research services to inform institutional investors’ stewardship and voting decisions.
The consultation is part of a wider review looking at the impact and implementation of the principles, and considering whether changes are needed to the principles themselves or to how they are reporting on and monitored.
The review will also consider what actions are needed to ensure the principles are fully compatible with the mandatory requirements for proxy advisors operating in the EU that are contained in the revised EU shareholder rights directive, which takes effect in 2019.
Chris Hodge, chair of the steering group carrying out the review, said: ‘The role of proxy advisors is a subject than can often generate more heat than light. This review is an opportunity to shed more light on their activities, and to identify ways in which the standards in the principles might be strengthened and reporting against them made more informative.
‘We are particularly keen to get first hand evidence from investors who use the services of voting research providers and from companies who have had direct dealings with them.’
As well as Hodge, who was formerly director of corporate governance at the Financial Reporting Council (FRC), the steering group includes representatives of the five current signatories: Glass, Lewis & Co; Institutional Shareholder Services (ISS); Manifest Information Services Ltd; PIRC Ltd and Proxinvest. The steering group is supported by an advisory panel whose members have broad experience and knowledge of investors, companies and different national markets.
The consultation is open until 15 December.
Details of the consultation on the best practice principles for shareholder voting research are here.
The principles can be found here.
Report by Pat Sweet
