Describe your typical execution method.
During 2016, ACSI met with 135 ASX300 companies in 181 formal engagements. These meetings are generally organised ahead of the companies’ shareholder AGMs, or shortly after those events, where material issues have arisen or are perceived as likely to arise. The meetings almost always occur with Non-executive members of the boards, usually at the level of company Chair, often including board committee chairs responsible for People and Remuneration issues. Most boards also bring investor relations, general counsel or HR executives for part of the discussions.
Our ‘execution method’ relies on identification of specific issues, and the actions/outcomes we are seeking from the company, and the company’s actions to address the issues identified.
Some engagements are driven by thematic issues, either through ACSI’s pre-determined priority programs or where issues emerge in specific sectors which are seen as potentially damaging to long-term investment values: - i.e. ethical sourcing after the clothing manufacturing tragedies in Bangladesh or in franchising structures in relation to underpayment of workers, or when ACSI’s research highlights a particular risk within a company or sector.
For all companies covered by ACSI’s voting service, ACSI usually corresponds either via meeting or teleconference around the time of the company meeting, or writes to each company where there was an ‘against’ recommendation expressing its rationale and concerns. Companies where there are more material concerns become corporate governance engagement priorities where ACSI typically holds face-to-face meetings with the company seeking a change its practices.
Alongside meetings, ACSI sent 314 letters to company chairs on topics including board confidence, sustainability reporting practices and board gender diversity.
The general process undertaken as a part of the engagement process include taking into consideration:
• Priority company issues
• Internal and external research
• Proxy voting research and outcomes
• Any type of publicly available documents e.g.: annual reports, sustainability reports.