1. Principle – Institutional investors should publicly disclose their policy on how they will discharge their stewardship responsibilities.
Based on feedback from both clients and the wider market, PIRC developed a set of best practice principles that provide a framework for how we operate our business.
PIRC publishes yearly shareowner voting guidelines for the various markets that we cover. These guidelines set out clearly our views on issues such as board structure, remuneration policy and management of social and environmental issues. We believe that the guidelines give both our clients and the companies we analyse a clear understanding of our view of best practice and, by extension, how we are likely to recommend shareowners vote on particular issues.
2. Principle - Institutional investors should have a robust policy on managing conflicts of interest in relation to stewardship and this policy should be publicly disclosed.
One of our principles of best practice is the disclosure of conflicts of interest. PIRC has taken the business decision that, given the inherent conflict of interest, we should not seek to provide service to both issuers and shareowners. Therefore PIRC only provides services to shareowners.
3. Principle - Institutional investors should monitor their investee companies.
Monitoring of companies on behalf of institutional shareowners is the core of PIRC’s business and function as an organisation. We provide global research and voting recommendations, based on companies’ disclosures and other sources of information. In practice we undertake a daily trawl for information that could inform our view of a given company, ranging from RNS statements to media coverage. This is supplemented with information derived from meeting with companies and their representatives.
Increasingly we are working with clients to help them take an ongoing view on corporate governance and social responsibility at companies, rather than considering a snapshot at the time of a given company meeting. We have recently developed a quantitative tool to assist shareowners to more clearly identify where potential risks lie in their portfolios, to enable them to undertake focused engagement.
4. Principle - Institutional investors should establish clear guidelines on when and how they will escalate their activities as a method of protecting and enhancing shareholder value.<