Institutional Investors with assets under management of USD 31 trillion want more detailed disclosure from portfolio companies about their boards of directors, business strategy and ESG, according to Morrow Sodali’s annual Institutional Investor Survey, released today.
The survey highlights three areas of concern for investors looking ahead to the 2018 annual meeting season:
- Clear articulation of a company’s business strategy and goals;
- Directors’ skills, qualifications, experience and individual contribution to the effectiveness of the board;
- Detailed business rationale for board decisions and their alignment with strategy and financial performance.
The Morrow Sodali survey, the third of its kind, was conducted between November and December 2017. Forty-nine global Institutional Investors, with USD 31 trillion of assets under management, responded to the survey.
Survey respondents also indicated that:
- Investors will prioritize directors’ skills ahead of gender or ethnic diversity.
- Unjustified pay will come under intense scrutiny.
- Investor collaboration around broader Annual Shareholder Meeting topics will increase exponentially.
- Institutional Investors will be increasingly likely to support a credible activist story.
- ESG issues are either fully integrated or progressing towards full integration with investment decision-making.
- Investors will seek enhanced disclosure around materiality and sustainable metrics linked to long-term business strategy.
Kiran Vasantham, Director of Investor Engagement, said “Now in its third year, this survey provides issuers with valuable insights on investor expectations. It is a bellwether for all companies as we enter the 2018 Annual Shareholder Meeting season. I am delighted so many investors took part in the survey, as it provides an important overview of asset managers’ priorities on a broad spectrum of ESG issues.”