Erik Breen Head of Corporate Governance & Sustainability November 3, 2005 Engaging with companies in practice
<ul><li>Engaging with companies in practice </li></ul><ul><li>How to decide which companies and which issues to press? </l...
<ul><li>Effective engagement aligns on significant subjects </li></ul>$ % ▲ » Portfolio Focus on investments with long hol...
<ul><li>Two reasons why asset managers can engage with companies </li></ul><ul><li>Investments </li></ul><ul><li>Bought fo...
<ul><li>The means of communication that asset managers can use </li></ul>Reputation   Risk Low High High impact Private Co...
Be shy with press contacts as long as the dialogue is running <ul><li>April 2005  </li></ul><ul><li>A Dutch investor magaz...
Negative press quotes may seriously hurt your clients’ interests In the period coinciding with the article and the adverti...
<ul><li>Conclusion </li></ul><ul><li>Engagement is most effective if it is material to the investor and the company </li><...
Contact details Erik Breen [email_address] Engaging with companies in practice
Disclaimer <ul><li>All copyrights patents and other property in the information contained in this document is held by Robe...
Upcoming SlideShare
Loading in …5
×

Various approaches in dealing with this growing phenomenon. What is effective? Does it provide value? How to improve?

295 views

Published on

Erik Breen, Head of Corporate Governance & Sustainability - Robeco - Netherlands

Published in: Economy & Finance, Business
0 Comments
0 Likes
Statistics
Notes
  • Be the first to comment

  • Be the first to like this

No Downloads
Views
Total views
295
On SlideShare
0
From Embeds
0
Number of Embeds
1
Actions
Shares
0
Downloads
4
Comments
0
Likes
0
Embeds 0
No embeds

No notes for slide
  • Welkom,
  • 17-08-09 In the next slides we will first deal with the impact of SRI on corporate earnings and on the expected stock performance. Next, we will find that constructing a SRI universe and ultimately a SRI portfolio is a challenging, labor-intensive but very interesting and rewarding task. I will outline Robeco’s SRI investment process and also show you a typical SRI portfolio as a result. A hot topic in the media nowadays is the responsibility to exercise the voting rights you have as a shareholder. We will discuss Robeco’s voting policy. Let first turn to the impact of SRI on corporate earnings.
  • Robeco onderscheidt 4 facetten van goede CG. Het 1e facet is het recht van aandeelhouders op informatie. Juist, tijdig, betrouwbaar, relevant en makkelijk toegankelijk. Het 2e facet is het recht op invloed: gelijk stemrecht per aandeel met minimale belemmeringen om het stemrecht uit te oefenen. Het 3e facet betreft de gerichte beloning van bestuurders, in lijn met de belangen van de aandeelhouders. De beloning is hoog, als het hoog moet zijn, maar niet als dat niet nodig is. Het 4e facet is de relatie van het bedrijf met zijn omgeving, in brede zin en uitgaande van een lange termijn gedachte. Robeco heeft een eigen filosofie over Corporate Governance. Deze filosofie is tot stand gekomen door de combinatie van twee academische theorieën, de principal agent theorie en de public choice theorie. De filosofie ligt vast in de “Robeco principals” en is praktische vertaald naar stemgedrag over verschillende onderwerpen. Een uitgebreid paper met dit theoretisch kader, de “Robeco principals” en de stem code is op verzoek verkrijgbaar.
  • Robeco onderscheidt 4 facetten van goede CG. Het 1e facet is het recht van aandeelhouders op informatie. Juist, tijdig, betrouwbaar, relevant en makkelijk toegankelijk. Het 2e facet is het recht op invloed: gelijk stemrecht per aandeel met minimale belemmeringen om het stemrecht uit te oefenen. Het 3e facet betreft de gerichte beloning van bestuurders, in lijn met de belangen van de aandeelhouders. De beloning is hoog, als het hoog moet zijn, maar niet als dat niet nodig is. Het 4e facet is de relatie van het bedrijf met zijn omgeving, in brede zin en uitgaande van een lange termijn gedachte. Robeco heeft een eigen filosofie over Corporate Governance. Deze filosofie is tot stand gekomen door de combinatie van twee academische theorieën, de principal agent theorie en de public choice theorie. De filosofie ligt vast in de “Robeco principals” en is praktische vertaald naar stemgedrag over verschillende onderwerpen. Een uitgebreid paper met dit theoretisch kader, de “Robeco principals” en de stem code is op verzoek verkrijgbaar.
  • Robeco onderscheidt 4 facetten van goede CG. Het 1e facet is het recht van aandeelhouders op informatie. Juist, tijdig, betrouwbaar, relevant en makkelijk toegankelijk. Het 2e facet is het recht op invloed: gelijk stemrecht per aandeel met minimale belemmeringen om het stemrecht uit te oefenen. Het 3e facet betreft de gerichte beloning van bestuurders, in lijn met de belangen van de aandeelhouders. De beloning is hoog, als het hoog moet zijn, maar niet als dat niet nodig is. Het 4e facet is de relatie van het bedrijf met zijn omgeving, in brede zin en uitgaande van een lange termijn gedachte. Robeco heeft een eigen filosofie over Corporate Governance. Deze filosofie is tot stand gekomen door de combinatie van twee academische theorieën, de principal agent theorie en de public choice theorie. De filosofie ligt vast in de “Robeco principals” en is praktische vertaald naar stemgedrag over verschillende onderwerpen. Een uitgebreid paper met dit theoretisch kader, de “Robeco principals” en de stem code is op verzoek verkrijgbaar.
  • 17-08-09
  • 17-08-09
  • 17-08-09 In the next slides we will first deal with the impact of SRI on corporate earnings and on the expected stock performance. Next, we will find that constructing a SRI universe and ultimately a SRI portfolio is a challenging, labor-intensive but very interesting and rewarding task. I will outline Robeco’s SRI investment process and also show you a typical SRI portfolio as a result. A hot topic in the media nowadays is the responsibility to exercise the voting rights you have as a shareholder. We will discuss Robeco’s voting policy. Let first turn to the impact of SRI on corporate earnings.
  • Welkom,
  • Various approaches in dealing with this growing phenomenon. What is effective? Does it provide value? How to improve?

    1. 1. Erik Breen Head of Corporate Governance & Sustainability November 3, 2005 Engaging with companies in practice
    2. 2. <ul><li>Engaging with companies in practice </li></ul><ul><li>How to decide which companies and which issues to press? </li></ul><ul><li>Why and how asset managers engage with companies </li></ul>
    3. 3. <ul><li>Effective engagement aligns on significant subjects </li></ul>$ % ▲ » Portfolio Focus on investments with long holding period and significant holdings in terms of euro’s Company Focus on significant holdings in terms of percentage ownership in the company Value drivers Focus on opportunities and risks that significantly influence the companies value drivers Change Management should be able to influence the issue Dialogue Ask management to focus on taking opportunities and avoiding social and ecological risks in order to increase the share price of the company. Size and horizon of investments Material issues that can be influenced
    4. 4. <ul><li>Two reasons why asset managers can engage with companies </li></ul><ul><li>Investments </li></ul><ul><li>Bought for the purpose of engagement </li></ul><ul><li>Needs to be fairly concentrated in order to have real influence </li></ul><ul><li>Engagement </li></ul><ul><li>Very intensive aimed at change </li></ul><ul><li>Horizon is short to medium term </li></ul><ul><li>Investments </li></ul><ul><li>Primarily bought for the purpose of performance </li></ul><ul><li>Can be any ordinary equity portfolio </li></ul><ul><li>Engagement </li></ul><ul><li>Varies per company from basic engagement to very intensive </li></ul><ul><li>Horizon includes short to medium term </li></ul><ul><li>Also creating awareness for longer term issues </li></ul>Engagement as an alpha strategy Engagement as a fiduciary duty
    5. 5. <ul><li>The means of communication that asset managers can use </li></ul>Reputation Risk Low High High impact Private Collective with large institutes Collective with all shareholders In public, through media Low impact Give press quote Joint open letter Open letter Speak on conferences Issue press release Costs High Low Management meeting Company visit Letter and e-mails Telephone call Attend AGM / EGM Speaking jointly at AGM / EGM Specific site visit Joint letter Speak at AGM / EGM Jointly call an EGM Arrange a joint shareholder resolution Active voting plus report Management meeting Joint meeting with management
    6. 6. Be shy with press contacts as long as the dialogue is running <ul><li>April 2005 </li></ul><ul><li>A Dutch investor magazine placed an tendentious article stating that the stock of De Vries Robbe Groep was worth at most 11,5 eurocent. This quote came from a Dutch activist group representing shareholders. </li></ul><ul><li>September 2005 </li></ul><ul><li>The same activist group placed an advertisement that warned investors for the excessive overvaluation of stocks of De Vries Robbe Groep </li></ul>
    7. 7. Negative press quotes may seriously hurt your clients’ interests In the period coinciding with the article and the advertisement the stock price fell The share drops 37% in a period of two weeks The share initially loses 18% to eventually close 8 % lower
    8. 8. <ul><li>Conclusion </li></ul><ul><li>Engagement is most effective if it is material to the investor and the company </li></ul><ul><li>The goal of engagement defines the means </li></ul><ul><li>Pick carefully from a wide range of communication methods </li></ul><ul><li>Be shy with press contact as long as the dialogue is running </li></ul><ul><li>Negative press quotes are not in the interest of your client </li></ul>
    9. 9. Contact details Erik Breen [email_address] Engaging with companies in practice
    10. 10. Disclaimer <ul><li>All copyrights patents and other property in the information contained in this document is held by Robeco Institutional Asset Management and shall continue to belong to Robeco Institutional Asset Management. No rights whatsoever are licensed or assigned or shall otherwise pass to persons accessing this information. </li></ul><ul><ul><li>This document has been carefully prepared and is presented by Robeco Institutional Asset Management. It is intended to supply the reader with information and reference on Robeco Institutional Asset Management's specific capabilities and it is to be used as the basis for an investment decision with respect to this capability. The content of this document is based upon sources of information believed to be reliable, but no warranty or declaration, either explicit or implicit, is given as to their accuracy or completeness. This document is not intended for distribution to or use by any person or entity in any jurisdiction or country where such distribution or use would be contrary to local law or regulation. </li></ul></ul><ul><ul><li>The information relating to the performance is for historical information only. Past performance is not indicative for future results. </li></ul></ul>

    ×