Stewardship & Strategy Forums
There is a strong demand from investors for increased exposure to, and more insights from, board members, and in particular NEDs. While many companies hold some form of annual governance event or meeting, the agenda of these meetings can often be dominated by remuneration discussions, rather than linking the skills of the board to the long-term strategic ambitions of the company.
We believe there is an opportunity to improve the effectiveness of these events, for the benefit of both investors and board members. Outside of board meetings and the AGM, it is extremely rare that a number of non-executive directors are in a room at the same time and available to meet with investors. It is important that when opportunities arise, companies can identify a compelling agenda to mobilise a strong cross-section of shareholders.
The Investor Forum has developed the concept of Stewardship & Strategy Forums (SSFs). The objectives of SSFs are to increase confidence that companies are being managed in the long-term interests of shareholders and to create a stronger understanding between boards and investors.
A SSF meeting brings together key board members, executives, investment decision makers and governance practitioners, to address a bespoke agenda that enables shareholders to evaluate the contribution of the board and the executive in constructing, controlling and executing strategy.
Rolls-Royce SSF Case Study
The Forum undertook a collective engagement with Rolls Royce in 2015. Details on the engagement can be found in our 2015-2016 Annual Review. Our members’ input helped to inform the company’s operational review that year.
One of the engagement’s key objectives was that the company hold a Stewardship and Strategy Forum. The open approach of the company was key to enhancing investor confidence as the incoming CEO took the actions needed to stabilise the business.
The Forum provided key input to the event, which took place in April 2016, in order to achieve the following:
- An agenda which met key shareholder concerns, as raised via the Forum;
- A structure which allowed interactive discussion;
- Company participation from both senior executives and non-executive board members;
- Investors from a range of institutions, involving both senior portfolio managers and governance professionals
“Working with the Investor Forum has helped us understand differing shareholder views in a very timely way. As a result, they made an effective contribution to our plans for change and shareholder engagement”
Ian Davis, Chairman of Rolls-Royce plc