Institutional investors with several trillions of dollars worth of assets under their management now want much more information about companies’ boards and business strategy.
A new survey by Morrow Sodali, which is the third in the series says institutional investors managing assets worth $31 trillion want companies to give more detailed disclosure about their board of directors, business strategies, environment, social and governance (ESG) practices.
Morrow Sodali says, the annual Institutional Investor Survey released Saturday February 3, 2018 highlights three areas of concern for investors looking ahead to the 2018 annual meeting season;
It indicates the need for clear articulation of a company’s business strategy and goals; Directors’ skills, qualifications, experience and individual contribution to the effectiveness of the board; and a detailed business rationale for board decisions and their alignment with strategy and financial performance.
The 49 global institutional investors who responded to the survey also indicated that they will prioritize directors’ skills ahead of gender or ethnic diversity. Unjustified pay will come under intense scrutiny and investor collaboration around broader Annual Shareholder Meeting topics will increase exponentially.
They will be increasingly likely to support a credible activist story and will demand that ESG issues are either fully integrated or progressing towards full integration with investment decision-making, and they will seek enhanced disclosure around materiality and sustainable metrics linked to long-term business strategy.
Morrow Sodali describes itself as a global consultancy providing comprehensive governance and shareholder services to corporate clients around the world.
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