The Institute of Chartered Secretaries and Administrators (ICSA) has published new guidance, commissioned by the 2020 Investor Stewardship Working Party under the chairmanship of Sir John Egan, aimed at improving the quality of engagement activity. The guidance, entitled “Enhancing Stewardship Dialogue”, states that companies and institutional investors need to focus more on discussing long term strategy and long term performance and the factors which create and destroy value.
More specifically, the guidance has been designed to provide practical advice on:
- Making meetings between companies and institutional investors more productive – helping make the best use of participants’ time and creating the optimum conditions for dialogue
- Creating a more meaningful dialogue between companies and institutional investors, outside of the traditional results season, on strategy and long term performance
- Improving the feedback process between companies and institutional investors on the quality of meetings
- Using the learning developed as a result to improve engagement practices
The guidance also emphasises four key messages:
- Develop an engagement strategy;
- Get the housekeeping right;
- Strengthen the conversation on strategy and long term performance; and
- Provide feedback.
Finally, the guidance includes a sample engagement strategy, practical guidance on setting up and structuring meetings and a non-exhaustive content framework for the discussion on long term strategy and performance.
A copy of the guidance can be found here.