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РОССИЙСКИЙ ФОРУМ 2017. Презентация 12 -- D.F. King EMEA (Великобритания)

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Спикер: Эмилия Варфис, Директор, D.F. King EMEA (Великобритания)
Презентация: "Как повысить вовлечённость миноритарных акционеров в корпоративные действия компании?"

| РОССИЙСКИЙ IR-ФОРУМ 2017
| Дата проведения: 23.05.2017
| Место: г.Москва, зал Московской биржи на Воздвиженке
| Аудитория: 95 специалистов по IR, корп. управлению, фин. коммуникациям

#InvestorRelations #RussianIRForum2017 #ARFI #АРФИ #МосковскаяБиржа #MoscowExchange #EMEX #Интерфакс #Interfax

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РОССИЙСКИЙ ФОРУМ 2017. Презентация 12 -- D.F. King EMEA (Великобритания)

  1. 1. Engagement with Minority Shareholders How to involve them? 23 May 2017
  2. 2. ORIENT CAPITAL / D.F. King • IR Best Practice Pre and Post Governance Engagement 2ARFI - Engagement with Minority Shareholders - May 2017
  3. 3. Orient Capital / D.F. King • 3 United States • Home of IR, most established market • Highly respected & developing career • Lack of international experience • Legalistic focus • Low levels of Board refreshment UK • Largest IR market ‘in Europe’ • Strong corporate broking influence • Generally lean IR teams • Strong international standing but not consistently high Germany • Strong international IRO’s • Substantial investment in IR • Large teams, clear remits • CSR often included • Examples of IROs (CFO, Board) Asia Pac / Australia • Diversity in evolution • Cross over with UK & Australia • Japan more control, less proactive • HK as Europe & US exposure • China market to watch in IR profession, developing Middle East • Mandatory IR role strategic and key for region • Exchanges and MEIRA pivotal in IR development (QSE excellence programme / ) • Developing liquidly encouraging IR practice post MSCI upgrade • Succession planning • ME market to watch in IR profession Scandinavia • Diverse IR profession • Strong global international companies & biotech IPO scene • Large cos, mirror Germany / Small cos, IR & Comms combined • IPO trend CEO & CFO very involved in IR Global IR Trends Source: Fidelio White Paper September 2016 / Shareholder Engagement, the Board and IR ARFI - Engagement with Minority Shareholders - May 2017
  4. 4. Orient Capital / D.F. King • 4 Who are your Investors? Identification coverage expectations • Geographical location of fund manager & funds managed (by city) • Investment style of funds & fund management firm • Type of fund manager • Shareholder concentration analysis (% of equity held by Top investors) • Breakdown of Beneficial Owners • Commentary on movements Key focus • Monitor movement regularly • Focus on trends but with granular considerations Shareholder Identification = vital for your CG strategy KNOW ARFI - Engagement with Minority Shareholders - May 2017
  5. 5. Orient Capital / D.F. King •ARFI - Engagement with Minority Shareholders - - May 2017 5 Who do your investors want to talk to? UNDERSTAND Senior Mgmt (CEO, CFO) IRO Chairman / non-execs Operational Mgmt 2015 v 2016: More requests for engagement Senior Mgmt (CEO, CFO) IRO Chairman / non-execs Operational Mgmt 2015 v 2016: Similar level of requests for engagement Key points • In past 12 months, senior management (CEO, CFO) are seeing an nominal decrease in their engagement with investors • 20% increase on direct engagement with IR • However there has been a 5% increase in investors seeking more engagement with the Chair and Non-execs Over 35% of respondents noted investors seeking more interaction with the Board Source: UK IR Society Annual Membership Survey 2015 & 2016
  6. 6. Orient Capital / D.F. King • 6 How are you performing?TRACK & MEASURE Measure and monitor your CG effort, progress and efficiency • Once a year, ahead of your strategy update meeting with the Board • Align messaging on equity story, strategy and remuneration IR Best Practice: • Considered a necessary and efficient IR tool among IRO’s in the UK • Clearly identifies investor’s needs • Understand sector and peers best practices and improve delivery of IR/CG communication Value for money: • Expensive? It’s a myth … • Feedback you will NOT receive face to face • Contact ANY type of investor, even if not covered by a broker house Perception Study = vital for your CG strategy ARFI - Engagement with Minority Shareholders - May 2017
  7. 7. Orient Capital / D.F. King • 7 • Run Regular Analysis/Shareholder Identification • Know who ALL of your shareholders are • Be on the front foot to avoid negative surprises • Understand your shareholder base via Perception Studies • Streamline your IR and Governance messaging • Measure your performance • Continuously improve your investor engagement • Analyse your communications though post governance Perception Studies Summary KNOW UNDERSTAND TRACK & MEASURE ARFI - Engagement with Minority Shareholders - May 2017
  8. 8. ORIENT CAPITAL / D.F. King • Corporate Governance on the Agenda ARFI - Engagement with Minority Shareholders - May 2017 8
  9. 9. Orient Capital / D.F. King •ARFI - Engagement with Minority Shareholders - May 2017 9 CG in State Owned Companies • Research September - December 2016 on volume and quality of disclosed information • 27 interviews conducted with Independent Directors, Institutional and Portfolio Investors • Improvement in disclosure since introduction of Corporate Governance Codex by Central Bank of Russia in 2014 Potential for improvement: • Election of Independent Directors • True Independence • Engagement with Minority shareholders • Efficiency of internal audit Independent researchers recommend : - Improve Disclosure - Improve elections of the Board Members - improve Board Structure - Stop voting by quasi-treasury shares - Implement profit distribution by MFSO Corporate Governance in Russia 4.07 3.84 3.76 3.50 3.09 2.96 2.94 2.85 2.80 2.69 2.19 1.85 1.60 SBERBANK BASHNEFT ALROSA AEROFLOT ROSTELEKOM RUSHYDRO FGC UES ROSNEFT OAK ROSSETI VTB GAZPROM TRANSNEFT Source: Association of Professional Investors , The Laboratory of Business Communications Research of Higher School of Economics
  10. 10. Orient Capital / D.F. King •ARFI - Engagement with Minority Shareholders - - May 2017 10 Engagement in practiceUNDERSTAND Investors requesting engagement • BLACKROCK (2012 - 2017) Annual Letters to US & EU companies ‘seeking dialogue’, now want board access by asking to engage with a SID • VANGUARD (Feb 2016) Letter to 500 companies • SSGA (Feb 2016) Open Letter to Directors • FIDELITY (2012 – 2014) 2014 voted against 52% of FTSE 350’s rem proposals • CALSTRS (2010)Withdrawal of 21-28 shareholder proposals after successful engagement • Top US 170 institutional investors – 92% increase in engagement Companies shifting to engagement  USA = >60% of boards undergo outreach to institutional investors  UK = FTSE 100 50% “We adopt a positive engagement approach whereby we discuss issues with the management of the companies in which we invest. We use the information gathered during these meetings to inform our investment decisions and also to encourage company management to improve procedures and policies. We believe that this is the most effective way to improve the attitude of business towards corporate responsibility.” Fidelity International  FRANCE = CAC 40 >50%  SWITZERLAND = SMI 90%
  11. 11. Orient Capital / D.F. King •ARFI - Engagement with Minority Shareholders - - May 2017 11 Engagement with Proxy Advisors ENGAGE ISS - Less direct engagement • Limiting the room for dialogue and case by case decisions • Quantify corporate governance assessment  2014 - Introduction of ISS Quality Score (MICEX 50)  2016 - Migrated their US pay-for-performance model to STOXX 600 companies GLASS LEWIS - Enhancement of their engagement • Enables accounting for specific circumstances in research reports & eventually, recommendations  2016 – new engagement program - 1st round over 600 European companies pro-actively invited to introductory meetings / conference calls  2017 – continued engagement, annual conversations with all their clients‘ European portfolio companies “Engagement needs to happen and it needs to happen now. Engage and engage early. ” Michael Vogele Senior Director of European Engagement GLASS LEWIS
  12. 12. Orient Capital / D.F. King •ARFI - Engagement with Minority Shareholders - - May 2017 12 Investor engagement in RussiaENGAGE Have you ever been approached for engagement by Russian issuers? • 20% YES Would you be open to engaging with Russian issuers? • 100% YES Do you think it could have a positive impact on voting in the Russian market? • 100% YES What governance improvements would you like to see from Russian issuers? • Board independence • Diversity • Protection of rights of minority investors • Further explanation of Compensation report • Transparency in director election • Easier access to IR teams – wish for objective detached conversation • One share one vote • Better qualified boards and structures (split Chair & CEO)
  13. 13. Orient Capital / D.F. King •ARFI - Engagement with Minority Shareholders - - May 2017 13 Kick starting engagementPLAN & IMPLEMENT • Define a ‘COMBINED’ Team • Corporate Governance Assessment • Corporate Governance Benchmarking • In-depth Investor Analysis/Profiling • Recommendations • Impact Assessement • Proxy Impact Reports • Vote Projections • CG Roadshow “As long-term investors we want to help companies be as good as they can be. Therefore, we would like to engage with the Chairman and/or SID following a review to discuss the outcomes of the review for the board and its committees and processes, as well as what changes have been made and the action points to take forward.” Sacha Sedan Director of Corporate Governance & Board member LGIM
  14. 14. Orient Capital / D.F. King •ARFI - Engagement with Minority Shareholders - - May 2017 14 Further engagement considerations PLAN & IMPLEMENT • Investor Outreach & Engagement Bridge the gap between investment and governance decision making Understand the internal decision making process • Board Engagement IR Team present reviews and investor feedback and best practices to the Board to increase transparency and further board autonomy • Proactive AGM Investor Outreach Maintain proactive communications until AGM to be consistent throughout your efforts “Our preferred approach to drive greater board independence is through an active dialogue and engagement with company and board leadership. In the event that companies fail to take action, despite our best efforts to actively engage with them, we will use our proxy voting power to effect change.” Anne Sheehan Director of Corporate Governance CALSTRS
  15. 15. Orient Capital / D.F. King •ARFI - Engagement with Minority Shareholders - - May 2017 15 Recommendations to improve disclosure DEVELOP & IMPROVE • IR results presentations vs annual reports • Set out the long-term strategic direction of the company • Short-term results in the context of the long term strategy • Link strategic report KPIs to Remuneration policy • Demonstrate ESG processes are embedded in philosophy/culture • Explain corporate governance system and its fit within the business  Board Profile  Executive remuneration metrics “CalSTRS’ general approach to engagement is reflective of our role as long-term universal owners. And as a long-term owner, we have a responsibility to actively engage the companies in our portfolio. Our policies reflect this commitment, including our commitment to disclose our voting decisions to the companies in our portfolio.” Ronald P. O’Hanley President & CEO State Street Global Advisors Open letter to Directors Feb 2016
  16. 16. ORIENT CAPITAL / D.F. King •ARFI - Engagement with Minority Shareholders - May 2017 16 Review & Preparation • Post AGM Analysis • CG Assessment • CG Benchmarking • Investor Profiling Perception Study • Receive feedback & research need for change in CG Strategy Investor Engagement / CG Roadshow • 1-1 meetings • Engagement with proxy advisors • Impact Assessment • Vote Simulation AGM • Pre Agenda Analysis • Follow up engagement • Proxy Solicitation JULY - OCT OCT - FEB MAY - JUNE CG Timetable – Engagement & AGM NOTE: (Engagement consultations during the proxy season between March and June may not meet with sufficient response) SHID • Identify change in minority shareholders FEB - APRIL
  17. 17. Orient Capital / D.F. King • 17 Orient Capital has been providing specialist IR support for over 25 years. With offices in London, New York, Hong Kong, Paris, Frankfurt, Johannesburg, Dubai, Melbourne, Sydney, we provide specific expertise in: Investor targeting Perception studies Webcasting Capital Markets Day Roadshows IR communications management technology - miraqle® www.orientcap.com Corporate Governance Advisory AGM/EGM solicitation & Transaction support Bond identification & Solicitation www.dfkingltd.com Aemilia Varfis Director, D.F. King, EMEA +44 207 920 9726 aemilia.varfis@dfkingltd.com Sergei Zhogota BD Director, Orient Capital +44 207 776 7589 sergei.zhogota@orientcap.com

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