Stewardship survey

Stewardship in Practice

The IA Stewardship Survey 2018 outlines the stewardship activities of IA members with respect to UK companies as of 30 June 2018. The findings are based on survey responses from 59 firms, representing 71% of the £7.7 trillion managed in the UK by IA members.

MAIN FINDINGS

• The average in-house stewardship resource is approximately 33 professionals per asset management firm. This resource consists mainly of portfolio managers and analysts indicating a significant degree of integration of stewardship into the investment process.
• 55% of asset managers use proxy voting service providers for recommendations. 89% use them for processing voting instructions.
• IA members reported over 7,100 instances of engagement with UK companies in the year to 30 June 2018, averaging 158 engagements per asset manager.
• The most important issue for engagement was company strategy followed by financial performance, capital allocation, leadership and executive remuneration. These were also the issues that asset managers ended up engaging on most frequently albeit executive remuneration was ranked in third place for frequency.
• Over 70% of asset managers are engaging with UK companies on key areas identified in the IA Productivity Action Plan including reporting on capital management strategy, reporting on culture, human capital and intangibles, and long-term drivers of productivity.
• Over half (56%) of asset managers have engaged with UK companies on gender diversity and 42% had made a voting decision based on this.
• 75% of asset managers engaged collectively with other investors mainly via direct communication or through representative bodies such as the IA and the Investor Forum.
• 39% of asset managers faced at least one conflict of interest when engaging with a UK company.
• The quality of engagement with UK companies was rated as ‘excellent’ for, on average, 26% of cases and ‘good’ for 41% of cases.
• Over 80% of asset managers reported that engagement led to better investment decisions and for 30% this was considerably better investment decisions. Over 50% changed the nature of their dialogue with investee companies as a result of their engagement experience.
• On average, 89% of the votes cast for UK companies were in favour, 9% against and 2% abstained.
• Over half (59%) of respondents do not engage in stock-lending but most of those that do recall stock that is on loan for contentious votes.
• 85% of respondents disclose their voting records publicly either as a full list or as a summary. By comparison 57% publish a report containing details of their engagement activities.