The size of SSGA’s global assets and reputation in the market provides the Asset Stewardship Team with access to the management and boards of investee companies. Therefore, the majority of corporate engagements are carried out on a one-to-one basis behind closed doors, as we feel this is critical to building trust and establishing constructive long-term relationships with companies. Nevertheless, SSGA collaborates with like-minded investors under certain circumstances. Factors that are considered when determining the merits of collaborative action include:
- Agreement amongst investors on core areas of concern and potential solutions;
- Systemic market-wide concerns and regulatory environment;
- Responsiveness of management and boards to prior individual engagements;
- Concentrated ownership within the share register; and,
- Market culture and acceptance of shareholder engagement.
To facilitate this process, SSGA are members of national and global investor bodies including the UK Investment Association, The Investor Forum, International Corporate Governance Network, Asian Corporate Governance Association, the Council of Institutional Investors and the United Nations Principles for Responsible Investment. In addition, through our membership in various industry networks, as well as our contact with corporate pension plans, public funds and unions, we are able to communicate extensively with other stakeholders regarding events and issues relevant to individual corporations, general industry trends and current shareholder concerns.
Example of Collaborative Initiative
USA: Signatory to the Commonsense Principles of Corporate Governance
In July 2016, SSGA joined a group of US investors and corporations and became a signatory to the Commonsense Principles of Corporate Governance that were developed by CEOs from multiple firms. This was the first CEO-led initiative to develop a set of Principles for US companies. Details of this initiative can be found http://www.governanceprinciples.org/.
UK: Active Participant/Member in Meetings of the Investment Managers Association and the UK Corporate Governance Forum