While the responsibility for implementing our approach resides with all of our personnel, we have a number of structures and teams to ensure that across the firm we discharge our stewardship responsibilities effectively.
We have a well-established governance structure that is led by the Board. Among the multitude of responsibilities residing with the Board is the formulation of our strategy, namely to help individuals invest and retire better, to help clients achieve better risk-adjusted returns, and to contribute to positive outcomes in the wider world.
Our Chief Executive has passionately led the development and implementation of our mission and responsibility goals. We believe it is our responsibility to lead discussion and debate about the fiduciary responsibilities of fund managers to our clients, their stakeholders and, ultimately, society at large, a role that our Chief Executive actively leads and contributes to. In particular, our Chief Executive is the founder of the 300 Club, an independent forum that challenges the orthodoxy of the investment industry and puts forward approaches to align the industry more closely to the goals of beneficiaries. He is also a member of the Banking Standards Board, the FCA-PRA Climate Financial Risk Forum, the International Integrated Reporting Council and the Global Steering Committee of UNEP FI.
Our dedicated Responsibility Office, led by the Head of Responsibility, reports to our CEO and coordinates and supports the integration of our responsibility approach and activities across our funds and stewardship services. This includes quarterly meetings with each of the investment teams to review their ESG and engagement integration activities, as well as asset- and issuer-specific discussions related to ESG and engagement. The Responsibility Office is also responsible for leading our advocacy and corporate citizenship work and ensuring that all of our business areas are acting in the interests of clients and their beneficiaries.
Portfolio managers and investment analysts
Each of our investment teams has formulated their own responsibility plans that explain how, in the context of their particular strategy and investment universe, they incorporate ESG factors and engagement within their investment process. Each team is responsible for undertaking their own fundamental ESG research and is accountable through the performance appraisal system for their part in delivering our mission.
Responsible investment staff
Our stewardship team EOS boasts one of the largest stewardship resources of any fund manager in the world. The team is composed of individuals with a diverse mix of backgrounds, skills and perspectives and has been at the forefront of the development and evolution of responsible investment practices globally.
Our Corporate Communications team is responsible for the communication of responsible investment internally, as well as externally. The also ensure alignment between our internal policies and external statements.
Our Investment Office is the guardian of the investment outcomes we deliver to clients, acting independently to ensure that our strategies are performing in the best interests of clients. It embodies our commitment to being a responsible and transparent asset manager. The Head of the Investment Office is effectively our CIO
Customer Outcomes Group ("COG")
The COG meets on a monthly basis and exists to support the Federated Hermes product governance, by providing a forum through which products (including funds and segregated mandates) are reviewed and assessed through a client-centric lens. Good product governance is aligned with our focus on responsible investment management, and we aim to put the customer at the heart of product design and management. The COG will utilise a customer centric view in reviewing investment products and when considering our obligations to investors both directly and indirectly via distributors.
The group reviews every strategy at least on an annual basis; this includes reviewing how well the fund integrates ESG and its engagement progress.
Responsibility Working Group
We have established a Responsibility Working Group, which meets on a quarterly basis and is constituted of senior representatives from across the business and is chaired by our Head of Responsibility. This group is charged with reviewing and making recommendations to our ExCo with respect to our policy and approach to all matters related to the delivery of holistic returns to the beneficiaries of our owners and clients and to share best practice across the organisation.
Accountable to and reporting to our CEO, the Governance Committee is a formal oversight committee responsible for overseeing the formulation and delivery of our engagement and voting policy for all our equity funds. Members are Head of Responsibility (chair), Head of Investment, Head of EOS, Head of Client Relationship Management and Strategic Risk and Compliance Director.
Corporate Citizenship Group
Consisting of the Head of Responsibility (chair), Corporate Citizenship Programme Manager, the COO, an EOS representative and the Head of HR, this group oversees and steers the firm’s corporate citizenship activities with local communities and on staff wellbeing and inclusion ensuring that all activities are closely aligned to and inform our responsible investment and ownership activities.
Other business processes
To ensure responsibility is embedded in all the firm’s business decisions, Responsibility Office colleagues are members of the firm’s key committees including the Portfolio Review Committee (investment), Business Development Forum (new products), Customer Outcomes Group (client delivery) and IT Steering Group.